Catholic Charities Bureau, Inc. v. State of Wisconsin Labor and Industry Review Commission

2024 WI 13

• Court: Wisconsin Supreme Court
• Decided: March 14, 2024
• Docket: 2020AP002007
• Status: Published

Opinion

2024 WI 13

SUPREME COURT OF WISCONSIN CASE NO.: 2020AP2007

COMPLETE TITLE: Catholic Charities Bureau, Inc., Barron County Developmental Services, Inc., Diversified Services, Inc., Black River Industries, Inc. and Headwaters, Inc., Petitioners-Respondents-Petitioners, v. State of Wisconsin Labor and Industry Review Commission, Respondent-Co-Appellant, State of Wisconsin Department of Workforce Development, Respondent-Appellant.

REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 406 Wis. 2d 586, 987 N.W.2d 778 (2023 – published)

OPINION FILED: March 14, 2024 SUBMITTED ON BRIEFS: ORAL ARGUMENT: September 11, 2023

SOURCE OF APPEAL: COURT: Circuit COUNTY: Douglas JUDGE: Kelly J. Thimm

JUSTICES: ANN WALSH BRADLEY, J., delivered the majority opinion of the Court, in which DALLET, KAROFSKY, and PROTASIEWICZ, JJ., joined. REBECCA GRASSL BRADLEY, J., filed a dissenting opinion, in which ZIEGLER, C.J., joined with respect to ¶¶110-61 and 163-98. HAGEDORN, J., filed a dissenting opinion. NOT PARTICIPATING:

ATTORNEYS:

For the petitioners-respondents-petitioners, there were briefs filed by Kyle H. Torvinen, and Torvinen, Jones & Saunders, S.C., Superior; Eric C. Rassbach (pro hac vice), Nicholas R. Reaves (pro hac vice), Daniel M. Vitagliano (pro hac vice), and The Becket Fund for Religious Liberty, Washington, D.C. There was an oral argument by Eric Rassbach.

For the respondent-appellant and respondent-co-appellant, there was a brief filed by Christine L. Galinat, and Department of Workforce Development, Madison; Jeffrey J. Shampo, and Labor and Industry Review Commission, Madison. There was an oral argument by Jeffrey J. Shampo.

An amicus curiae brief was filed by Daniel R. Suhr, and Hughes & Suhr LLC, Chicago, IL; Caleb R. Gerbitz, James M. Sosnoski, and Meissner Tierney Fisher & Nichols SC, Milwaukee, on behalf of Maranatha Baptist University, Maranatha Baptist Academy, Concordia University Wisconsin, the Wisconsin Family Counsel, and the Wisconsin Association of Christian Schools.

An amicus curiae brief was filed by Robert S. Driscoll, and Reinhart Boerner Van Deuren SC, Milwaukee; Stephen M. Judge (pro hac vice), Tiernan Kane (pro hac vice), and South Bank Legal, South Bend, IN, on behalf of Catholic Conferences of Illinois, Iowa, Michigan, and Minnesota.

An amicus curiae brief was filed by Gene C. Schaerr (pro hac vice), James C. Phillips (pro hac vice), and Schaerr Jaffee LLP, Washington, D.C.; Matthew M. Fernholz, and Cramer, Multhauf & Hammes, LLP, Waukesha, on behalf of Minnesota-Wisconsin Baptist Convention, Lutheran Church - Missouri Synod, National Association of Evangelicals, American Islamic Congress, The Church of Jesus Christ of Latter-day Saints, General Council on Finance and Administration of the United Methodist Church, The Ethics and Religious Liberty Commission, and Islam and Religious Freedom Action Team.

2 An amicus curiae brief was filed by Timothy Feldhausen, Tiffany Woelfel, and Amundsen Davis LLC, Green Bay; Sarah M. Harris (pro hac vice), Mark S. Storslee (pro hac vice), Rohit P. Asirvatham (pro hac vice), and Williams & Connolly LLP, Washington, D.C., on behalf of Professors Douglas Laycock & Thomas C. Berg.

An amicus curiae brief was filed by Levi W. Swank, Benjamin Hayes, and Goodwin Procter LLP, D.C.; Dina Ljekperic, and Goodwin Procter LLP, New York, NY; David W. Simon, Gregory N. Heinen, and Foley & Lardner LLP, Milwaukee, on behalf of International Society for Krishna Consciousness and The Sikh Coalition.

An amicus curiae brief was filed by Jon P. Axelrod, J. Wesley Webendorfer, and DeWitt LLP, Madison; Howard Slugh (pro hac vice), and The Jewish Coalition for Religious Liberty, Washington, D.C., on behalf of Jewish Coalition for Religious Liberty.

An amicus curiae brief was filed by Samuel Troxell Grover, Patrick C. Elliott, Madison, on behalf of Freedom From Religion Foundation.

An amicus curiae brief was filed by David Earleywine, and Wisconsin Catholic Conference, Madison; Bradley G. Hubbard (pro hac vice), Elizabeth A. Kiernan (pro hac vice), Zachary Faircloth (pro hac vice), Jason J. Muehlhoff (pro hac vice), and Gibson, Dunn & Crutcher LLP, Dallas, TX, on behalf of Wisconsin Catholic Conference.

An amicus curiae brief was filed by Jonathan Judge, and ArentFox Schiff LLP, Chicago, IL, on behalf of Catholic Charities USA. 3 An amicus curiae brief was filed by Ryan J. Walsh, John D. Tripoli, and Eimer Stahl LLP, Madison, on behalf of Wisconsin State Legislature.

4 2024 WI 13 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2020AP2007 (L.C. No. 2019CV324)

STATE OF WISCONSIN : IN SUPREME COURT

Catholic Charities Bureau, Inc., Barron County Developmental Services, Inc., Diversified Services, Inc., Black River Industries, Inc. and Headwaters, Inc.,

Petitioners-Respondents-Petitioners,

v. FILED State of Wisconsin Labor and Industry Review MAR 14, 2024 Commission, Samuel A. Christensen Clerk of Supreme Court Respondent-Co-Appellant,

State of Wisconsin Department of Workforce Development,

Respondent-Appellant.

ANN WALSH BRADLEY, J., delivered the majority opinion of the Court, in which DALLET, KAROFSKY, and PROTASIEWICZ, JJ., joined. REBECCA GRASSL BRADLEY, J., filed a dissenting opinion, in which ZIEGLER, C.J., joined with respect to ¶¶110-61 and 163-98. HAGEDORN, J., filed a dissenting opinion.

REVIEW of a decision of the Court of Appeals. Affirmed. No. 2020AP2007

¶1 ANN WALSH BRADLEY, J. The petitioners, Catholic

Charities Bureau, Inc. (CCB) and four of its sub-entities, seek

an exemption from having to pay unemployment tax to cover their

employees. They assert that they are exempt from coverage under

Wisconsin's Unemployment Compensation Act because they are

operated primarily for religious purposes.

¶2 Accordingly, CCB together with the four sub-entities

(Barron County Developmental Services, Inc., Diversified

Services, Inc., Black River Industries, Inc., and Headwaters,

Inc.) seek review of a court of appeals decision reinstating a

decision of the Labor and Industry Review Commission (LIRC)

concluding that CCB and the four sub-entities were not "operated

primarily for religious purposes" and thus not exempt from

making contributions to the state unemployment insurance system.1

The petitioners specifically contend that they are exempt from

unemployment insurance contributions pursuant to Wis. Stat.

§ 108.02(15)(h)2. (2019-20),2 which exempts from the definition

of "employment" covered by the Act those "[i]n the employ of an organization operated primarily for religious purposes and

1 Cath. Charities Bureau, Inc. v. LIRC, 2023 WI App 12, 406 Wis. 2d 586, 987 N.W.2d 778 (reversing the order of the circuit court for Douglas County, Kelly J. Thimm, Judge). 2 All subsequent references to the Wisconsin Statutes are to the 2019-20 version unless otherwise indicated.

2 No. 2020AP2007

operated, supervised, controlled, or principally supported by a

church or convention or association of churches."3

¶3 They assert that they are "operated primarily for

religious purposes" because the Diocese of Superior's motivation

is primarily religious, i.e., their charitable works are carried

out to operationalize Catholic principles. The petitioners

further argue that a contrary interpretation would run afoul of

the First Amendment to the United States Constitution and that

as a result it also would violate Article I, Section 18 of the

Wisconsin Constitution.4

¶4 On the other hand, LIRC advances that it is the

organization's actual activities, and not its motivations, that

are paramount in the analysis. Under this formulation, LIRC

contends the petitioners do not fulfill the religious purposes

3Both parties agree that the first half of the statute is not at issue, that is that CCB is "operated, supervised, controlled, or principally supported by a church or convention or association of churches." 4Although CCB and its sub-entities allege a violation of the Wisconsin constitution, they did not develop an argument apart from their assertions under the United States Constitution. They assert in a footnote that if the statute violates the First Amendment, then it must also violate the Wisconsin Constitution. It is true that "[t]he Wisconsin Constitution, with its specific and expansive language, provides much broader protections for religious liberty than the First Amendment." Coulee Cath. Schs. v. LIRC, 2009 WI 88, ¶66, 320 Wis. 2d 275, 768 N.W.2d 868 (citing State v. Miller, 202 Wis. 2d 56, 64, 549 N.W.2d 235 (1996)). However, any argument that Wis. Stat. § 108.02(15)(h)2. violates the state constitution specifically is undeveloped. We generally do not address undeveloped arguments, and we will not do so here. Sw. Airlines Co. v. DOR, 2021 WI 54, ¶32 n.10, 397 Wis. 2d 431, 960 N.W.2d 384.

3 No. 2020AP2007

exemption because their activities are secular. Such an

analysis, in LIRC's view, does not violate the First Amendment

or Article I, Section 18 of the Wisconsin Constitution.

¶5 We determine that in our inquiry into whether an

organization is "operated primarily for religious purposes"

within the meaning of Wis. Stat. § 108.02(15)(h)2., we must

examine both the motivations and the activities of the

organization. Applying this analysis to the facts before us, we

conclude that the petitioners are not operated primarily for

religious purposes within the meaning of § 108.02(15)(h)2. We

further conclude that the application of § 108.02(15)(h)2. as

applied to the petitioners does not violate the First Amendment

because the petitioners have failed to demonstrate that the

statute as applied to them is unconstitutional beyond a

reasonable doubt.

¶6 Accordingly, we affirm the decision of the court of

appeals.

I ¶7 Each Roman Catholic diocese in Wisconsin has a social

ministry arm, referred to as Catholic Charities. As a whole,

Catholic Charities' mission "is to provide service to people in

need, to advocate for justice in social structures and to call

the entire church and other people of good will to do the same."

¶8 The Catholic Charities entity at issue in this case is

that of the Diocese of Superior, which we refer to as CCB. Its

statement of philosophy indicates that it has "since 1917 been providing services to the poor and disadvantaged as an 4 No. 2020AP2007

expression of the social ministry of the Catholic Church in the

Diocese of Superior" and that its "purpose . . . is to be an

effective sign of the charity of Christ." In its provision of

services, CCB assures that "no distinctions are made by race,

sex, or religion in reference to clients served, staff employed

and board members appointed." CCB aims to provide services that

are "significant in quantity and quality" and not duplicative of

services provided by other agencies.

¶9 Occupying the top position in CCB's organizational

chart is the bishop of the Diocese of Superior, who exercises

control over CCB and its sub-entities. The bishop serves as

CCB's president and appoints its membership, whose function is

to "provide[] essential oversight to ensure the fulfillment of

the mission of Catholic Charities Bureau in compliance with the

Principles of Catholic social teaching." CCB's code of ethics,

which is "displayed prominently in the program office of all

affiliate agencies," likewise sets forth the expectation that

"Catholic Charities will in its activities and actions reflect gospel values and will be consistent with its mission and the

mission of the Diocese of Superior."

¶10 Under the umbrella of CCB, there are numerous

separately incorporated sub-entities. These sub-entities

operate "63 programs of service . . . to those facing the

challenges of aging, the distress of a disability, the concerns

of children with special needs, the stresses of families living

in poverty and those in need of disaster relief."

5 No. 2020AP2007

¶11 Four sub-entities are involved in this case. The

first is Barron County Developmental Services, Inc. (BCDS).

BCDS contracts with the Department of Vocational Rehabilitation

to provide job placement, job coaching, and an "array of

services to assist individuals with disabilities [to] get

employment in the community." Prior to December of 2014, BCDS

was not affiliated with the Diocese of Superior, and in fact had

no religious affiliation at all. At that time, BCDS reached out

and requested to become an affiliate agency of the Diocese. It

receives no funding from the Diocese.

¶12 The second sub-entity at issue is Black River

Industries, Inc. (BRI). It provides services to people with

developmental or mental health disabilities, as well as those

with a limited income. These services include home-based,

community-based, and facility-based job training and daily

living services. Among BRI's offerings are a food services

program, a document shredding program, and a mailing services

program. BRI's funding comes largely from county and state government. It does not receive funding directly from the

Diocese.

¶13 Diversified Services, Inc. (DSI) is the third sub-

entity implicated in this appeal. It provides work

opportunities to individuals with developmental disabilities.

Additionally, DSI hires individuals without disabilities for

production work. It is not funded by the Diocese, instead

6 No. 2020AP2007

receiving its funding from Family Care, a Medicaid long-term

care program,5 and private contracts.

¶14 Finally, the fourth sub-entity involved is Headwaters,

Inc., which provides "various support services for individuals

with disabilities," "training services related to activities of

daily living," "employment related training services" and

additional employment-related support. It also provides Head

Start home visitation services, and at one time offered birth-

to-three services before a different entity took over that

aspect of its operations. Like the other sub-entities,

Headwaters is funded primarily through government contracts and

does not receive funding from the Diocese.

¶15 These four sub-entities are overseen by CCB, which,

among other things, provides management services and

consultation; establishes and coordinates the missions of the

sub-entities; and approves all capital expenditures, certain

sales of real property, and investment policies of the sub-

entities. In turn, the sub-entities themselves set organizational goals and make plans to accomplish those goals,

employ staff, set program policies, enter into contracts, raise

funds, and assure regulatory compliance.

¶16 Additionally, CCB's executive director supervises the

operations of each of the sub-entities. However, neither those

employed by nor those receiving services from CCB or the sub-

entities are required to be of any particular religious faith.

5 See Wis. Admin. Code ch. DHS 10.

7 No. 2020AP2007

Individuals participating in the programs do not receive any

religious training or orientation, and CCB and the sub-entities

do not try to "inculcate the Catholic faith with program

participants."

¶17 In 1972, the Department of Industry, Labor and Human

Relations made a determination that CCB was subject to the

unemployment compensation law after CCB submitted a form that

self-reported the nature of its operations as "charitable,"

"educational," and "rehabilitative," not "religious."6 CCB has

been making unemployment contributions since that time.

¶18 In 2015, the Douglas County Circuit Court determined

that a sub-entity of CCB not involved in the present case was

"operated primarily for religious purposes" and thus exempt from

contributing to the state unemployment system.7 The following

year, CCB and the sub-entities sought a similar determination

that they qualified for the exemption, bringing their claim

first to the Department of Workforce Development (DWD).

¶19 DWD denied the petitioners' request to withdraw from the state system. It stated: "It has been determined these

organizations are supervised and controlled by the Roman

Catholic Church, but it has not been established they are

CCB and the sub-entities are exempt from federal income 6

tax pursuant to 26 U.S.C. § 501(c)(3), which provides exemption to, among other entities, those "operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes."

Challenge Ctr., Inc. v. LIRC, Douglas County Case No. 7

2014CV384 (George L. Glonek, Judge).

8 No. 2020AP2007

operated primarily for religious purposes." CCB and the sub-

entities appealed DWD's determination, and an administrative law

judge (ALJ) reversed. Consequently, DWD petitioned LIRC for

review, and LIRC reversed the ALJ, concluding consistent with

the original DWD decision that the petitioners are not operated

primarily for religious purposes. It observed that "while

services may be religiously motivated and manifestations of

religious belief, a separate legal entity that provides

essentially secular services and engages in activities that are

not religious per se . . . falls outside the scope of Wis. Stat.

§ 108.02(15)(h)2.," regardless of any affiliation the entity may

have with a religious organization.

¶20 Subsequently, CCB and the sub-entities sought judicial

review in the circuit court and the pendulum swung again, as the

circuit court reversed LIRC's decision. DWD and LIRC appealed,

and the court of appeals reversed, reinstating LIRC's decision

that CCB and the sub-entities did not establish a religious

purpose.8 Cath. Charities Bureau, Inc. v. LIRC, 2023 WI App 12, 406 Wis. 2d 586, 987 N.W.2d 778. The court of appeals concluded

that "for an employee's services to be exempt from unemployment

tax the organization must not only have a religious motivation,

but the services provided——its activities——must also be

primarily religious in nature." Id., ¶33. Such an analysis, in

8The court of appeals initially certified the appeal to this court, but we denied the certification. See Wis. Stat. § (Rule) 809.61; Cath. Charities Bureau, Inc. v. LIRC, No. 2020AP2007, unpublished certification (Wis. Ct. App. Dec. 7, 2021).

9 No. 2020AP2007

the court of appeals' view, does not violate either the federal

or state constitution because "focusing on the stated

motivations and the organization's activities allows the

reviewing body to conduct an objective, neutral review that is

'highly fact-sensitive' without examining religious doctrine or

tenets." Id., ¶54.

¶21 Applying this understanding, the court of appeals

determined that "CCB and its sub-entities failed to meet their

burden to establish that they are exempt from Wisconsin's

unemployment insurance program and that LIRC properly determined

that each of the employers was 'operated primarily to administer

[or provide] social service programs' that are not 'primarily

for religious purposes.'" Id., ¶55. CCB and the sub-entities

petitioned for this court's review.

II

¶22 In an appeal from a LIRC determination, we review

LIRC's decision rather than that of the circuit court. Masri v.

LIRC, 2014 WI 81, ¶20, 356 Wis. 2d 405, 850 N.W.2d 298. Our review is limited by statute. See Wis. Stat. § 108.09(7)(c)6.

We may either confirm the commission's order or set it aside on

one of three grounds: (1) if the commission acted without or in

excess of its powers; (2) if the order was procured by fraud; or

(3) if the commission's findings of fact do not support the

order. Id. LIRC acts outside of its power when it incorrectly

interprets a statute. DWD v. LIRC, 2018 WI 77, ¶12, 382

Wis. 2d 611, 914 N.W.2d 625.

10 No. 2020AP2007

¶23 We will uphold LIRC's findings of fact as long as

there is substantial and credible evidence to support them.

Friendly Vill. Nursing and Rehab, LLC v. DWD, 2022 WI 4, ¶13,

400 Wis. 2d 277, 969 N.W.2d 245. We review LIRC's legal

conclusions, i.e., questions of law, independently of the

decisions rendered by the circuit court, the court of appeals,

and the commission. Id.; Tetra Tech EC, Inc. v. DOR, 2018 WI

75, ¶84, 382 Wis. 2d 496, 914 N.W.2d 21.

¶24 In our review, we are called upon to interpret

Wisconsin statutes. Statutory interpretation presents a

question of law that we review independently of the

determinations of the circuit court, the court of appeals, and

the commission. Greenwald Fam. Ltd. P'ship v. Village of

Mukwonago, 2023 WI 53, ¶14, 408 Wis. 2d 143, 991 N.W.2d 356;

Tetra Tech EC, Inc., 382 Wis. 2d 496, ¶84.

¶25 Additionally, our review is informed by constitutional

principles. The application of constitutional principles

likewise presents a question of law. St. Augustine Sch. v. Taylor, 2021 WI 70, ¶24, 398 Wis. 2d 92, 961 N.W.2d 635.

III

¶26 We begin with a short summary of Wisconsin's

unemployment insurance scheme and then address the competing

interpretations of "operated primarily for religious purposes"

within the meaning of Wis. Stat. § 108.02(15)(h)2. In examining

this question, we address first whether we must look to the

purpose of the church in operating the organization or the purpose of the nonprofit organization itself in our analysis. 11 No. 2020AP2007

We address second whether the organization's motivations,

activities, or both, drive the analysis of whether a purpose is

"religious" within the meaning of § 108.02(15)(h)2. Next, we

apply our interpretation of the statute to the facts before us.

Finally, we examine the petitioners' assertion that such

interpretation violates the First Amendment.

A

¶27 The Wisconsin legislature passed the first

unemployment compensation law in the nation in 1932.9 Then, as

now, the law evinces a strong public policy in favor of

compensating the unemployed. Operton v. LIRC, 2017 WI 46, ¶31,

375 Wis. 2d 1, 894 N.W.2d 426.

¶28 At a macro level, "[t]he system generally provides for

collecting limited funds from a large number of employers,

particularly during periods of stable employment, then paying

out benefits during periods of high unemployment from the funds

that have been accumulated." Maynard G. Sautter, Employment in

Wisconsin § 12-1 (Matthew Bender 2023). The statutes were enacted "to avoid the risk or hazards that will befall those

who, because of employment, are dependent upon others for their

livelihood." Princess House, Inc. v. DILHR, 111 Wis. 2d 46, 69,

330 N.W.2d 169 (1983). "Consistent with this policy, Wis. Stat.

ch. 108 is 'liberally construed to effect unemployment

See Daniel Nelson, The Origins of Unemployment Insurance 9

in Wisconsin, 51 Wis. Mag. Hist. 109, 109 (1967); Operton v. LIRC, 2017 WI 46, ¶57, 375 Wis. 2d 1, 894 N.W.2d 426 (Abrahamson, J., concurring).

12 No. 2020AP2007

compensation coverage for workers who are economically dependent

upon others in respect to their wage-earning status.'" Operton,

375 Wis. 2d 1, ¶32 (quoting Princess House, 111 Wis. 2d at 62).

¶29 The legislature has recognized the social cost of

unemployment and the need to share the burden presented by

unemployment. See Wis. Stat. § 108.01(1). "In good times and

in bad times unemployment is a heavy social cost, directly

affecting many thousands of wage earners. Each employing unit

in Wisconsin should pay at least a part of this social cost,

connected with its own irregular operations, by financing

benefits for its own unemployed workers." Id.

¶30 "Generally, any service for pay for a public, private,

or nonprofit employer is employment [covered by ch. 108], but

the service must be provided in Wisconsin or be provided for an

employer with operations in Wisconsin." Peter L. Albrecht et

al., Wisconsin Employment Law § 12.3 (8th ed. 2023). However,

some services are statutorily exempt from the "employment"

services addressed by the unemployment compensation law. E.g., Wis. Cheese Serv., Inc. v. DILHR, 108 Wis. 2d 482, 486, 322

N.W.2d 495 (Ct. App. 1982) (examining whether an individual is

exempt from the unemployment system as an independent

contractor); see Sautter, Employment in Wisconsin § 12-3. It is

one of those exemptions, which we will refer to as the

"religious purposes" exemption, that is at issue in the present

case.

¶31 The religious purposes exemption is set forth as part of Wis. Stat. § 108.02(15)(h), which provides in full: 13 No. 2020AP2007

"Employment" as applied to work for a nonprofit organization, except as such organization duly elects otherwise with the department's approval, does not include service:

1. In the employ of a church or convention or association of churches;

2. In the employ of an organization operated primarily for religious purposes and operated, supervised, controlled, or principally supported by a church or convention or association of churches; or

3. By a duly ordained, commissioned or licensed minister of a church in the exercise of his or her ministry or by a member of a religious order in the exercise of duties required by such order. ¶32 Specifically, CCB and the sub-entities seek exemption

pursuant to subd. 2, which contains two conditions that both

must be fulfilled in order for the exemption to apply. First,

the subject organization must be "operated primarily for

religious purposes." Second, the organization must be

"operated, supervised, controlled, or principally supported by a

church or convention or association of churches." It is

undisputed that the second condition is satisfied, as CCB and

the sub-entities are without question "operated, supervised,

controlled, or principally supported" by the Diocese of

Superior. Our inquiry thus focuses on the first condition only:

"operated primarily for religious purposes."

¶33 In addressing the issue presented, we must answer the

threshold question of whose purposes we must examine in our

analysis——those of the Diocese or those of CCB and the sub-

entities. To resolve this inquiry, we look first to the language of Wis. Stat. § 108.02(15)(h)2. Sw. Airlines Co. v.

14 No. 2020AP2007

DOR, 2021 WI 54, ¶22, 397 Wis. 2d 431, 960 N.W.2d 384 (citing

State ex rel. Kalal v. Cir. Ct. for Dane Cnty., 2004 WI 58, ¶45,

271 Wis. 2d 633, 681 N.W.2d 110).

¶34 Like the court of appeals, our review of the plain

language of Wis. Stat. § 108.02(15)(h)2. leads us to conclude

that "the reviewing body is to consider the purpose of the

nonprofit organization, not the church's purpose in operating

the organization." Cath. Charities Bureau, 406 Wis. 2d 586,

¶24. There are several textual cues in this language that guide

us to our conclusion. We look first to the sentence structure

of Wis. Stat. § 108.02(15)(h)2. This structure indicates that

the religious purposes exemption applies to "service . . . [i]n

the employ" of an "organization," as opposed to service in the

employ of a church. The way the sentence is structured, the

phrase "operated primarily for religious purposes" modifies the

word "organization," not the word "church."

¶35 Such an understanding is confirmed by a look to the

surrounding provisions. See Belding v. Demoulin, 2014 WI 8, ¶15, 352 Wis. 2d 359, 843 N.W.2d 373. The subdivision directly

before the religious purposes exemption, Wis. Stat.

§ 108.02(15)(h)1., exempts from the definition of "employment"

for unemployment compensation purposes service "[i]n the employ

of a church." The subdivision directly after,

§ 108.02(15)(h)3., exempts service "[b]y a duly ordained,

commissioned or licensed minister of a church." Those employed

by a church are thus addressed in subdivisions 1. and 3., indicating, as the court of appeals concluded, that "employees 15 No. 2020AP2007

who fall under subd. 2. are to be focused on separately in the

statutory scheme from employees of a church." Cath. Charities

Bureau, 406 Wis. 2d 586, ¶25.

¶36 Thus, a focus on the church's purpose rather than the

organization's purpose would render a significant portion of

Wis. Stat. § 108.02(15)(h)2. surplusage. See State v. Martin,

162 Wis. 2d 883, 894, 470 N.W.2d 900 (1991) ("A statute should

be construed so that no word or clause shall be rendered

surplusage and every word if possible should be given effect.").

To explain, Wis. Stat. § 108.02(15)(h)2. contains two provisions

that both must be fulfilled. In order to be exempt, a nonprofit

organization must be "operated primarily for religious purposes"

and "operated, supervised, controlled, or principally supported

by a church." § 108.02(15)(h)2.

¶37 If we looked to the church's purpose in operating the

organization only, then any religiously affiliated organization

would always be exempt. A church's purpose is religious by

nature, and this focus is reflected in all of its work, including any sub-entities it oversees. If the tax-exempt

status of a nonprofit organization operating under the umbrella

of a church is predicated on the religious purposes of the

church, an organization operated or controlled by a church

always will automatically satisfy the first condition. In other

words, the second condition of Wis. Stat. § 108.02(15)(h)2.

would subsume the first. This would cause the first requirement

of the statute to be surplusage, a reading we cannot endorse. We therefore will examine the purpose of the nonprofit 16 No. 2020AP2007

organization, and not that of the church, in determining whether

a nonprofit organization is "operated primarily for religious

purposes."

B

¶38 Having determined that we look to the purpose of CCB

and the sub-entities, and not that of the Catholic Church in

operating CCB and the sub-entities, we turn next to another

methodological disagreement between the parties. CCB and the

sub-entities contend that in our inquiry into whether an

organization is "operated primarily for religious purposes" we

must look primarily to the organization's motivations, while

LIRC advances that the organization's activities are paramount.10

¶39 Specifically, CCB and the sub-entities argue that the

court of appeals incorrectly limited the religious purposes

exemption to church-controlled entities with both purposes and

Other jurisdictions have taken varying approaches to 10

similar questions. For example, some jurisdictions have considered the activities of an organization in determining religious purpose. See, e.g., Samaritan Inst. v. Prince-Walker, 883 P.2d 3, 8 (Colo. 1994) (concluding that an organization does not "operate primarily for religious purposes" because the "services offered are essentially secular"); Cathedral Arts Project, Inc. v. Dep't of Econ. Opportunity, 95 So. 3d 970, 973 (Fla. Dist. Ct. App. 2012) (determining that although an organization's motivation may be religious, the organization's "primary purpose in operating . . . is to give art instruction to underprivileged children" and it is therefore not entitled to the exemption). Conversely, other jurisdictions have granted a religious purpose exemption based on the motivations of the organization. See, e.g., Dep't of Emp. v. Champion Bake-N- Serve, Inc., 592 P.2d 1370, 1373 (Idaho 1979) (concluding that a bakery operated by Seventh Day Adventist church was operated primarily for religious purposes despite a commercial aspect).

17 No. 2020AP2007

activities that are religious. They assert that the court of

appeals' analysis fails to follow the statutory language because

the statute refers only to a religious "purpose" and not

religious "activities."

¶40 LIRC responds that looking at only an organization's

motivation would allow the organization to determine its own

status without consideration of its actual function. It

advances that such an interpretation would run afoul of the

maxim that tax exemptions are to be narrowly construed. In

LIRC's view, the court of appeals correctly concluded that the

term "operated," which appears in the statute, "connotes an

action or activity." See Cath. Charities Bureau, 406

Wis. 2d 586, ¶31.

¶41 Again, we begin our analysis with the language of the

statute, and in particular the language at the center of this

case: "operated primarily for religious purposes." The court

of appeals commenced its analysis by examining the key words

"operated" and "purposes," and we do likewise. ¶42 An oft-cited dictionary defines "operate" as "to work,

perform, or function, as a machine does." Operate,

https://www.dictionary.com/browse/operate (last visited Feb. 27,

2024), see also Operate, Merriam-Webster Online Dictionary,

https://www.merriam-webster.com/dictionary/operate (last visited

Feb. 27, 2024) (defining "operate" as "to perform a function").

As the court of appeals concluded, this definition suggests an

action being taken——in the context of the statute at issue

18 No. 2020AP2007

meaning "what the nonprofit organization does and how it does

it." Cath. Charities Bureau, 406 Wis. 2d 586, ¶31.

¶43 This same dictionary defines "purpose" as "the reason

for which something exists or is done, made, used, etc."

Purpose, https://www.dictionary.com/browse/purpose (last visited

Feb. 27, 2024). The use of "reason" in this definition implies

"motivation," or as the court of appeals put it, "why the

organization acts." Cath. Charities Bureau, 406 Wis. 2d 586,

¶31.

¶44 In examining the meaning of the statute, we must give

reasonable effect to every word. State v. Rector, 2023 WI 41,

¶19, 407 Wis. 2d 321, 990 N.W.2d 213. We read the statute as a

whole. Belding, 352 Wis. 2d 359, ¶15. Accordingly, both

"operated" and "purposes" must be given full effect. In order

to illustrate how to do this, we consider first the consequences

if our analysis considered motivations only or activities only

in determining whether an organization is operated primarily for

religious purposes. ¶45 Considering purposes, i.e., motivations, alone would

give short shrift to the word "operated." In this scenario, an

organization could be exempt based purely on its stated reason

for doing what it does, but its actual "operations" would not

enter the calculus. Conversely, if we were to consider

activities only, then "purposes" would be rendered surplusage.

A singular focus on the "operations" of the organization at the

expense of the "purpose" would lead us to excise from the

19 No. 2020AP2007

analysis the connection between the organization's activities

and its religious mission that the statute requires.

¶46 Reading the statute as a whole, the text and structure

of Wis. Stat. § 108.02(15)(h)2. indicate that both activities

and motivations must be considered in a determination of whether

an organization is "operated primarily for religious purposes."

Such an interpretation is consistent with the unemployment

compensation law's legislatively-recognized purpose. See Wis.

Stat. § 108.01; Princess House, 111 Wis. 2d at 61 (explaining

that in determining liability under the Unemployment

Compensation Act, "the act itself should be put in perspective,

and the underlying purpose of the act should be given paramount

consideration"). The unemployment compensation law addresses an

"urgent public problem" and does so by sharing "fairly" the

economic burdens of unemployment. Wis. Stat. § 108.01(1)-(2).

¶47 In light of this, we have stated that the unemployment

compensation law is "remedial in nature and should be liberally

construed to effect unemployment compensation coverage for workers who are economically dependent upon others in respect to

20 No. 2020AP2007

their wage-earning status." Princess House, 111 Wis. 2d at 62.11

As a corollary to this principle, it follows that if a statute

is liberally construed, then exceptions must be narrowly

construed. McNeil v. Hansen, 2007 WI 56, ¶10, 300 Wis. 2d 358,

731 N.W.2d 273.

¶48 Correctly demonstrating a narrow construction of the

exception, the court of appeals here concluded that looking at

an organization's motivations in a vacuum "would cast too broad

a net." Cath. Charities Bureau, 406 Wis. 2d 586, ¶37. Sole

reliance on self-professed motivation would essentially render

an organization's mere assertion of a religious motive

11Although the United States Supreme Court has in the past applied a similar principle of liberal construction of remedial statutes, see Peyton v. Rowe, 391 U.S. 54, 65 (1968), recent cases suggest a potential step back from this approach. See, e.g., Encino Motorcars, LLC v. Navarro, 584 U.S. __, 138 S. Ct. 1134, 1142 (2018). Nevertheless, we follow (and do not overrule) the Wisconsin approach to our Unemployment Compensation Act and our precedent regarding the interpretation of remedial statutes under the Act. See Operton, 375 Wis. 2d 1, ¶32; Princess House, Inc. v. DILHR, 111 Wis. 2d 46, 62, 330 N.W.2d 169 (1983); see generally Miller v. Hanover Ins. Co., 2010 WI 75, ¶31, 326 Wis. 2d 640, 785 N.W.2d 493; Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 22, ¶21, 308 Wis. 2d 103, 746 N.W.2d 762 (explaining that "remedial statutes must be liberally construed to advance the remedy that the legislature intended to be afforded"). The statutory text confirms the original intent of the legislature to provide broad coverage for unemployed workers that is "shared . . . fairly" among employers. See generally Wis. Stat. § 108.01.

21 No. 2020AP2007

dispositive.12 See Living Faith, Inc. v. Comm'r of Internal

Revenue, 950 F.2d 365, 372 (7th Cir. 1991) ("While we agree with

Living Faith that an organization's good faith assertion of an

exempt purpose is relevant to the analysis of tax-exempt status,

we cannot accept the view that such an assertion be dispositive.

Put simply, saying one's purpose is exclusively religious

doesn't necessarily make it so.").

¶49 Although the motivations of an organization certainly

figure into the analysis, allowing self-definition to drive the

exemption would open the exemption to a broad spectrum of

organizations based entirely on a single assertion of a

religious motivation.13 This would run counter to the direction

that we construe the exemption narrowly. Considering the

The stopping point of the argument presented by CCB and 12

the sub-entities is unclear. For example, at the administrative hearing in the present case, the Archbishop of Milwaukee testified that he is responsible for overseeing numerous grammar schools and high schools, 10 hospitals, and five colleges. Under the petitioners' argument, these entities' employees, numbering in the thousands, would seemingly lack coverage under the state unemployment system.

The argument advanced by the petitioners did not garner 13

anywhere close to a majority vote when addressed by the United States Supreme Court. At oral argument, Justice Thomas's concurrences in both Hosanna–Tabor Evangelical Lutheran Church and Sch. v. Equal Emp. Opportunity Comm'n, 565 U.S. 171, 196-98 (2012) (Thomas, J., concurring) and Our Lady of Guadalupe Sch. v. Morrissey-Berru, 591 U.S. __, 140 S. Ct. 2049, 2069-70 (2020) (Thomas, J., concurring, joined by Gorsuch, J.), were invoked to support the idea that courts must wholly defer to an organization's good-faith claims instead of examining the activities of the organization. However, this position was not supported by the majority in either case.

22 No. 2020AP2007

organization's activities in addition to its motivations is in

line with the directive that we follow a narrow construction.

¶50 Our decision in Coulee Catholic Schools v. LIRC, 2009

WI 88, 320 Wis. 2d 275, 768 N.W.2d 868, additionally buttresses

our conclusion. In that case, the court addressed an issue of

whether a teacher's position in a religious school is

"ministerial" such that the First Amendment bars suit under the

Wisconsin Fair Employment Act.14

¶51 In examining this question, the court applied the two-

part "primary duties" test. "The first step is an inquiry into

whether the organization in both statement and practice has a

fundamentally religious mission." Id., ¶48. Second, the court

inquires "into how important or closely linked the employee's

work is to the fundamental mission of that organization." Id.,

¶49.

¶52 Although the legal issue and context were different in

Coulee, we agree with the court of appeals that it "provides

guidance in understanding the religious purposes exemption

The "ministerial exception" recognizes "that the First 14

Amendment protects houses of worship from state interference with the decision of who will teach and lead a congregation." Coulee Cath. Schs., 320 Wis. 2d 275, ¶39. Premised on the "idea that the 'introduction of government standards [in]to the selection of spiritual leaders would significantly, and perniciously, rearrange the relationship between church and state,'" the exception "recognizes that 'perpetuation of a church's existence may depend upon those whom it selects to preach its values, teach its message, and interpret its doctrines both to its own membership and to the world at large.'" Id. (quoting Rayburn v. Gen. Conf. of Seventh-Day Adventists, 772 F.2d 1164, 1168-69 (4th Cir. 1985)).

23 No. 2020AP2007

here." Cath. Charities Bureau, 406 Wis. 2d 586, ¶43. To

explain, the first step of the primary duties test involves an

inquiry into an organization's mission. In analyzing such a

question, the Coulee court examined both the "statement" and

"practice" of the organization. Coulee Cath. Schs., 320

Wis. 2d 275, ¶48. See also Our Lady of Guadalupe Sch. v.

Morrissey-Berru, 591 U.S. __, 140 S. Ct. 2049, 2067-69 (2020).

In other words, it analyzed both the professions and actions of

the organization to determine the organization's "mission."

¶53 The "mission" inquiry in Coulee is analogous to the

"purpose" analysis we conduct in the present case. Indeed,

mission and purpose are even listed as synonyms by a popular

thesaurus. Mission, https://www.thesaurus.com/browse/mission

(last visited Feb. 27, 2024). The concepts are thus related,

and the Coulee court's analysis of two factors, professions and

operations, in its "mission" inquiry supports our examination of

similar dual considerations in the "purpose" question in the

present case. See also Our Lady of Guadalupe Sch., 140 S. Ct. at 2067-69.

¶54 Further, the Seventh Circuit's decision in United

States v. Dykema, 666 F.2d 1096 (7th Cir. 1981), lends support

to the assertion that the organization's activities have a role

to play in determining the organization's "purpose." In Dykema,

which involved a determination of a pastor's tax liability, the

Seventh Circuit observed that "religious purposes" is a "term of

art in tax law" and that the IRS, in order to determine whether such a purpose is present, must examine whether an 24 No. 2020AP2007

organization's "actual activities conform to the requirements

which Congress has established as entitling them to tax exempt

status." Id. at 1101 (emphasis added).

¶55 The Dykema court also emphasized that its inquiry into

religious purpose is based on "objective criteria," which

"enable the IRS to make the determination required by the

statute without entering into any subjective inquiry with

respect to religious truth which would be forbidden by the First

Amendment." Id. at 1100. It further charted "[t]ypical

activities of an organization operated for religious purposes"

as including:

(a) corporate worship services, including due administration of sacraments and observance of liturgical rituals, as well as a preaching ministry and evangelical outreach to the unchurched and missionary activity in partibus infidelium; (b) pastoral counseling and comfort to members facing grief, illness, adversity, or spiritual problems; (c) performance by the clergy of customary church ceremonies affecting the lives of individuals, such as baptism, marriage, burial, and the like; (d) a system of nurture of the young and education in the doctrine and discipline of the church, as well as (in the case of mature and well developed churches) theological seminaries for the advanced study and the training of ministers. Id. We reproduce this list not to create any requirement for an

organization to be determined to have a religious purpose, but

merely as an illustration. The Dykema court's listed hallmarks

of a religious purpose are by no means exhaustive or necessary

conditions and the listed activities may be different for

different faiths.

25 No. 2020AP2007

¶56 We do not adopt a rigid formula for deciding whether

an organization is operated primarily for religious purposes.

See Hosanna–Tabor Evangelical Lutheran Church and Sch. v. Equal

Emp. Opportunity Comm'n, 565 U.S. 171, 190 (2012). Instead, we

agree with the Dykema court that an examination of an

organization's activities lends itself to an objective inquiry

that does not lead us into a First Amendment quagmire, as will

be discussed further below.15

¶57 We therefore conclude that in determining whether an

organization.

15Our examination of an organization's activities also finds support in a federal law utilizing the same language as the statute we examine here. See 26 U.S.C. § 3309(b)(1)(B). A report of the House Ways and Means Committee on that law sets forth an example of its application that focuses on an organization's activities:

Thus, the services of the janitor of a church would be excluded, but services of a janitor for a separately incorporated college, although it may be church related, would be covered. A college devoted primarily to preparing students for the ministry would be exempt, as would a novitiate or a house of study training candidates to become members of religious orders. On the other hand, a church related (separately incorporated) charitable organization (such as, for example, an orphanage or a home for the aged) would not be considered under this paragraph to be operated primarily for religious purposes.

H.R. Rep. No. 91-612, at 44 (1969). Congress thus envisioned that an examination of activities, and not merely motivations, would be undertaken given the language we examine in this case.

26 No. 2020AP2007

C

¶58 We turn next to apply our statutory interpretation to

the facts before us. The burden to establish an exemption is on

CCB and the sub-entities. See Princess House, 111 Wis. 2d at

66; Sw. Airlines, 397 Wis. 2d 431, ¶24 (explaining that "[t]he

burden is on the party seeking the exemption to prove its

entitlement" and "taxation is the rule and exemption is the

exception").

¶59 CCB and the sub-entities profess to have a religious

motivation. Specifically, they state that their services "are

based on gospel values and the principles of the Catholic Social

Teachings." Indeed, it is part of CCB's mission to "carry on

the redeeming work of our Lord by reflecting gospel values and

the moral teaching of the church." We accept these statements

at face value, and LIRC does not argue that these assertions of

religious motivation are insincere, fraudulent, or otherwise not

credible. Cf. Holy Trinity Cmty. Sch., Inc. v. Kahl, 82

Wis. 2d 139, 155, 262 N.W.2d 210 (1978) (indicating that the court is "obliged to accept the professions of the school" as to

its affiliation and "to accord them validity without further

inquiry" but the court may "look behind such decisions where

there is evidence of fraud or collusion").

¶60 However, accepting an organization's motivations does

not end the inquiry as we must also examine its activities. We

look for guidance from prior cases to further the analysis. In

Dykema, the court's examination of activities focused on whether an organization participated in worship services, religious 27 No. 2020AP2007

outreach, ceremony, or religious education. Dykema, 666 F.2d at

1100. Here, such criteria weigh in favor of a determination

that CCB's and the sub-entities' activities are not "primarily"

religious in nature. The record demonstrates that CCB and the

sub-entities, which are organized as separate corporations apart

from the church itself, neither attempt to imbue program

participants with the Catholic faith nor supply any religious

materials to program participants or employees. Although not

required, these would be strong indications that the activities

are primarily religious in nature.

¶61 Our own precedent, albeit in another First Amendment

context, further bolsters this conclusion. In Coulee Catholic

Schools, 320 Wis. 2d 275, ¶48, we distinguished "one

religiously-affiliated organization committed to feeding the

homeless [that] has only a nominal tie to religion" from

"another religiously-affiliated organization committed to

feeding the homeless [that] has a religiously infused mission

involving teaching, evangelism, and worship" for purposes of the ministerial exception. CCB and the sub-entities fit into the

former category. Both employment with the organizations and

services offered by the organizations are open to all

participants regardless of religion.

¶62 CCB's and the sub-entities' activities are primarily

charitable and secular. The sub-entities provide services to

individuals with developmental and mental health disabilities.

These activities include job training, placement, and coaching, as well as services related to activities of daily living. CCB 28 No. 2020AP2007

provides background support and management services for these

activities——a wholly secular endeavor. See supra, ¶¶10-15.

¶63 Such services can be provided by organizations of

either religious or secular motivations, and the services

provided would not differ in any sense. This is illustrated by

a historical look at one of CCB's sub-entities, BCDS. As noted

by the court of appeals, BCDS was not under the CCB umbrella

until 2014, before which it had no affiliation with any

religious organization. See Cath. Charities Bureau, 406

Wis. 2d 586, ¶59. Yet the services provided before and after

BCDS's partnership with CCB commenced were exactly the same. We

agree with the court of appeals that "[t]he fact that the manner

in which BCDS carried out its mission did not change after it

became an affiliate of CCB supports our conclusion that BCDS'

purpose and operations are not primarily religious." Id.

¶64 The other three sub-entities at issue offer services

comparable to those offered by BCDS. In other words, they offer

services that would be the same regardless of the motivation of the provider, a strong indication that the sub-entities do not

"operate primarily for religious purposes."

¶65 This result is further supported with a look to

federal law. We observe that Wisconsin's religious purposes

exemption contains verbatim language to a provision of federal

law, with which Wisconsin's law was enacted to conform. See 26

U.S.C. § 3309(b)(1)(B); 1971 S.B. 330 (noting that the proposed

changes to Wisconsin law "will bring Wisconsin's law in line with the 1970 amendments to the federal unemployment tax act" 29 No. 2020AP2007

and that "[a]ny less coverage would cost federal tax credits").

A report of the House Ways and Means Committee on that federal

law indicates that, identical to Wisconsin's law, it:

excludes services of persons where the employer is a church or convention or association of churches, but does not exclude certain services performed for an organization which may be religious in orientation unless it is operated primarily for religious purposes and is operated, supervised, controlled, or principally supported by a church (or convention or association of churches). H.R. Rep. No. 91-612, at 44 (1969). Importantly, the House

Report continues and provides examples of employment that would

and would not be entitled to the exemption:

Thus, the services of the janitor of a church would be excluded, but services of a janitor for a separately incorporated college, although it may be church related, would be covered. A college devoted primarily to preparing students for the ministry would be exempt, as would a novitiate or a house of study training candidates to become members of religious orders. On the other hand, a church related (separately incorporated) charitable organization (such as, for example, an orphanage or a home for the aged) would not be considered under this paragraph to be operated primarily for religious purposes. Id. (emphasis added).

¶66 Comparing the services offered by CCB and the sub-

entities here to the listed examples, the "orphanage" or "home

for the aged" is analogous. The services provided by a

religiously run orphanage and a secular one do not differ in any

meaningful sense. The same is true of a "home for the aged."

And the same principle applies to the developmental services provided by the sub-entities at the center of this case.

30 No. 2020AP2007

¶67 Although CCB and the sub-entities assert a religious

motivation behind their work, the statutory language indicates

that this is not enough to receive the exemption. An objective

examination of the actual activities of CCB and the sub-entities

reveals that their activities are secular in nature. We

therefore conclude that CCB and the sub-entities are not

operated primarily for religious purposes within the meaning of

Wis. Stat. § 108.02(15)(h)2.

IV

¶68 Finally, we examine the petitioners' assertion that

the above statutory interpretation violates the First

Amendment.16 Specifically, they advance that such analysis and

conclusion creates a conflict with the First Amendment to the

United States Constitution by violating both the Establishment

Clause and Free Exercise Clause.

¶69 Together referred to as the Religion Clauses, the

Establishment and Free Exercise clauses provide in their

entirety: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise

thereof . . . ." U.S. Const. amend. I.

¶70 The Establishment Clause protects against three main

evils: sponsorship, financial support, and active involvement

In full, the First Amendment provides: 16 "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." U.S. Const. amend. I.

31 No. 2020AP2007

of the sovereign in religious activity. Jackson v. Benson, 218

Wis. 2d 835, 856, 578 N.W.2d 602 (1998) (citing Walz v. Tax

Comm'n, 397 U.S. 664, 668 (1970)). In other words, it operates

to prohibit the government from enacting laws that "aid one

religion, aid all religions, or prefer one religion over

another." Sch. Dist. of Abington Twp. v. Schempp, 374 U.S. 203,

216 (1963) (quoting Everson v. Bd. of Educ. of Ewing Twp., 330

U.S. 1, 15 (1947)).

¶71 It further prohibits the excessive entanglement of the

state in religious matters, a principle known as the

entanglement doctrine. St. Augustine Sch., 398 Wis. 2d 92, ¶42.

Excessive entanglement occurs "if a court is required to

interpret church law, policies, or practices." L.L.N. v.

Clauder, 209 Wis. 2d 674, 687, 563 N.W.2d 434 (1997). Such an

inquiry is prohibited by the First Amendment. Id. However, "a

court may hear an action if it will involve the consideration of

neutral principles of law." Id.

¶72 On the other hand, the Free Exercise Clause assures "the right to harbor religious beliefs" by "protecting the

ability of those who hold religious beliefs of all kinds to live

out their faiths in daily life." Kennedy v. Bremerton Sch.

Dist., 597 U.S. 507, 524 (2022). It protects religious

organizations' right "to decide for themselves, free from state

interference, matters of church government as well as those of

faith and doctrine." Coulee Cath. Schs., 320 Wis. 2d 275, ¶37

(quoting Kedroff v. St. Nicholas Cathedral of Russian Orthodox Church in N. Am., 344 U.S. 94, 116 (1952)). 32 No. 2020AP2007

¶73 Both Religion Clauses inform a doctrine known as the

church autonomy principle, which "is perhaps best understood as

marking a boundary between two separate polities, the secular

and the religious, and acknowledging the prerogatives of each in

its own sphere." Korte v. Sebelius, 735 F.3d 654, 677 (7th Cir.

2013). "The church-autonomy doctrine respects the authority of

churches to select their own leaders, define their own

doctrines, resolve their own disputes, and run their own

institutions free from governmental interference." Id. (quoted

source omitted). In other words, it protects religious

institutions from "secular control or manipulation." Kedroff,

344 U.S. at 116.

¶74 The Religion Clauses are inherently in tension with

each other. We acknowledged this complicated interplay in State

v. Yoder, 49 Wis. 2d 430, 444, 182 N.W.2d 539 (1971) aff'd

Wisconsin v. Yoder, 406 U.S. 205 (1972). Indeed, the Religion

Clauses are "not the most precisely drawn portions of the

Constitution." Walz, 397 U.S. at 668. Both clauses are "cast in absolute terms," id., and therefore have the tendency to

"overlap, can conflict, and cannot always be squared on any

strict theory of neutrality." Yoder, 49 Wis. 2d at 444.

¶75 The United States Supreme Court has also acknowledged

these tensions, instructing that "[a]dherence to the policy of

neutrality" is paramount to prevent "the kind of involvement

that would tip the balance toward government control of churches

or governmental restraint on religious practice." Walz, 397

33 No. 2020AP2007

U.S. at 669-70. At the same time, it emphasizes that strict

adherence is not always feasible:

The course of constitutional neutrality in this area cannot be an absolutely straight line; rigidity could well defeat the basic purpose of these provisions, which is to insure that no religion be sponsored or favored, none commanded, and none inhibited. The general principle deducible from the First Amendment and all that has been said by the Court is this: that we will not tolerate either governmentally established religion or governmental interference with religion. Short of those expressly proscribed governmental acts there is room for play in the joints productive of a benevolent neutrality which will permit religious exercise to exist without sponsorship and without interference. Id. at 669.

¶76 A religious institution's First Amendment rights are

not unlimited. Just as there are limitations on First Amendment

free speech, i.e., the proverbial prohibition of yelling "fire"

in a crowded theater,17 so too are there limitations here. The

challenge is to balance the competing interests. We are

assisted in achieving this balance by a review of precedent, and

by a review of how other jurisdictions have navigated the

challenge.

¶77 An as-applied challenge, such as that brought by CCB

and the sub-entities, requires an assessment of the merits of

the challenge by considering the facts of the particular case in

17 See Schenck v. United States, 249 U.S. 47, 52 (1919).

34 No. 2020AP2007

front of the court.18 State v. Hamdan, 2003 WI 113, ¶43, 264

Wis. 2d 433, 665 N.W.2d 785. For an as-applied challenge to

succeed, the challenger must demonstrate that the challenger's

constitutional rights were actually violated. State v.

Roundtree, 2021 WI 1, ¶18, 395 Wis. 2d 94, 952 N.W.2d 765. If

such a violation occurred, the operation of the law is void as

to the facts presented for the party asserting the claim. Id.

We presume that the statute is constitutional, and the party

raising a constitutional challenge must prove that the

challenged statute has been applied in an unconstitutional

manner beyond a reasonable doubt. Id.; State v. Christen, 2021

WI 39, ¶32, 396 Wis. 2d 705, 958 N.W.2d 746; State v. Wood, 2010

WI 17, ¶15, 323 Wis. 2d 321, 780 N.W.2d 63.

¶78 With this standard in mind, we turn now to the

petitioners' constitutional claims to determine whether CCB and

18 There are two major types of constitutional challenges: facial and as-applied. State v. Roundtree, 2021 WI 1, ¶17, 395 Wis. 2d 94, 952 N.W.2d 765. A party challenging a law as unconstitutional on its face must show that the law cannot be constitutionally enforced under any circumstances. Id. In contrast, in an as-applied challenge, the court assesses the merits of the challenge by considering the facts of the particular case before it. Id., ¶18. The parties' briefing was not particularly clear regarding which type of challenge CCB and the sub-entities bring here. Both LIRC and the court of appeals interpreted the petitioners' challenge to be an as-applied challenge, and we do the same. See Cath. Charities Bureau, 406 Wis. 2d 586, ¶47 ("[W]e note that the parties do not argue that the statute itself violates the First Amendment, meaning that CCB does not assert a facial constitutional challenge."). In any event, the standard for a facial challenge is more stringent, and if an as-applied challenge fails, then a facial challenge will also necessarily fail because the law can be constitutionally applied in at least one circumstance.

35 No. 2020AP2007

the sub-entities have made the requisite showing that Wis. Stat.

§ 108.02(15)(h)2. has been unconstitutionally applied to them

beyond a reasonable doubt. CCB and the sub-entities claim that

LIRC's statutory interpretation leads to a violation of the

Establishment Clause and the Free Exercise Clause in three ways:

(1) by causing an excessive state entanglement with religion,

(2) by violating the church autonomy principle, and (3) by

discriminating "against religious entities with a more complex

polity" and "penalizing CCB for its Catholic beliefs regarding

how it must serve those most in need." We address each argument

in turn.

¶79 CCB and the sub-entities assert initially that LIRC's

interpretation of the statutory exemption violates the

Establishment Clause by occasioning an excessive state

entanglement with religion. Specifically, they argue that

examination of an organization's activities "requires Wisconsin

courts (and government officials) to conduct an intrusive inquiry into the operations of religious organizations that seek

the religious purposes exemption."

¶80 However, the protection provided by the Establishment

Clause is not a blanket protection against any type of

governmental inquiry into a religious organization. There are

certain instances that require some investigation, including

determining tax liability or the applicability of a tax

exemption. See Walz, 397 U.S. at 675-76. In fact, investigations into tax-exempt status are consistent with a 36 No. 2020AP2007

long-standing tradition of treating religious organizations

equally under the law. See id. at 680. Indeed, both taxation

of churches and exemption "occasion[] some degree of involvement

with religion." Id. at 674.

¶81 The Establishment Clause does not treat religion as a

third rail that courts cannot touch. Rather, it ensures that

the inevitable "degree of involvement" in such a determination

does not cross into an evaluation of religious dogma. The

Supreme Court, in fact, has "upheld government benefits and tax

exemptions that go to religious organizations, even though those

policies have the effect of advancing or endorsing religion,"

Am. Legion v. Am. Humanist Ass'n, 588 U.S. __, 139 S. Ct. 2067,

2092 (2019) (Kavanaugh, J., concurring).

¶82 Although such an inquiry necessarily links the

government with religious organizations, "some degree of

involvement" does not offend the First Amendment. Walz, 397

U.S. at 674; see also id. at 697 n.1 (Harlan, J., concurring).

An inquiry evaluating "the scope of charitable activities in proportion to doctrinal pursuits may be difficult," but such

difficulty "does not render it undue interference with religion"

as long as it "does not entail judicial inquiry into dogma and

belief." Id. at 697 n.1 (Harlan, J., concurring).

¶83 The truth or falsity of a religious belief is not a

proper matter for us, or any other court to decide, but courts

still must answer "delicate question[s]" to avoid "allowing

every person to make his own standards on matters of conduct in which society as a whole has important interests." Yoder, 406 37 No. 2020AP2007

U.S. at 215-16. The key is for any inquiry a court undertakes

to remain on the right side of the line and not involve an

examination into the religious beliefs, practices, or dogma of

an organization. Cf. St. Augustine Sch., 398 Wis. 2d 92, ¶¶47-

49. For example, in St. Augustine School, we observed that an

examination of "a school's professions that are published on its

public website or set forth in filings with the state does not

necessarily require any investigation or surveillance into the

practices of the school." Id., ¶48. Consideration of

"professions" without any surveillance of whether an

organization's practices are consistent with a particular

religious dogma ensures that the inquiry remains on the right

side of the line. Id., ¶49.

¶84 Such is our challenge here. We begin the inquiry by

again looking at the statute at issue. As set forth above, the

language of Wis. Stat. § 108.02(15)(h)2. dictates that we

examine both the organization's motivations and activities to

determine whether the organization is "operated primarily for religious purposes" and thus is entitled to exemption from

unemployment tax.

¶85 Examining both the motivations and activities of the

organization requires minimal judicial inquiry into religion, as

there is no examination of whether CCB's or the sub-entities'

activities are consistent or inconsistent with Catholic

doctrine. A court need only determine what the nature of the

motivations and activities of the organizations are——not whether they are "Catholic" enough to qualify for the exemption. 38 No. 2020AP2007

¶86 Again, this inquiry requires "some degree of

involvement" with religion. See Walz, 397 U.S. at 674. But

rather than necessarily creating a constitutional problem, such

an inquiry is inherent in any statutory scheme that offers tax

exemption to religious entities. Id.; see id. at 675 ("There is

no genuine nexus between tax exemption and establishment of

religion."). The review we endorse in this case is a neutral

and secular inquiry based on objective criteria, examining the

activities and motivations of a religious organization. See St.

Augustine Sch., 398 Wis. 2d 92, ¶5 (concluding that a "neutral

and secular inquiry" into a religious organization is

constitutional); Dykema, 666 F.2d at 1100 (applying "objective

criteria" to an investigation into a religious organization's

activities.)

¶87 Our conclusion is consistent with those of other

courts that have examined similarly "delicate" questions. For

example, in Dykema, the Seventh Circuit examined an

organization's actual activities, just as we do here. Id. ("Objective criteria for examination of an organization's

activities . . . enable the IRS to make the determination

required by the statute without entering into any subjective

inquiry with respect to religious truth which would be forbidden

by the First Amendment."). Our examination of the motivations

and actual activities of an organization here is akin to our

consideration of a school's corporate documents, professions

with regard to self-identification and affiliation, and website to which we gave a constitutional seal of approval in St. 39 No. 2020AP2007

Augustine School. 398 Wis. 2d 92, ¶5. This "neutral and

secular" inquiry does not intrude on questions of religious

dogma. See id.

¶88 Further, a look to history strongly supports our

consideration of an organization's activities, to which CCB and

the sub-entities object. As detailed below, this history

establishes two essential principles for our purposes here.

First, that an inquiry into "purpose" that examines an

organization's actual activities has long been established in

statutory enactments and the common law, and second, that courts

have embraced, rather than shunned, a judicial inquiry into an

organization's actual activities in order to make a

determination of "purpose" to inform whether the organization

qualifies for exemption. Our decision here is thus consistent

with court's historical treatment of similar questions.

¶89 Religious tax exemption has been traced from ancient

times through the British common law. See John W. Whitehead,

Tax Exemption and Churches: A Historical and Constitutional Analysis, 22 Cumb. L. Rev. 521, 524-36 (1992). British common

law, and certain colonial legislatures, widely granted property

tax exemptions to church property. John Witte, Jr., Tax

Exemption of Church Property: Historical Anomaly or Valid

Constitutional Practice?, 64 S. Cal. L. Rev. 363, 372-74 (1991).

The law of equity, on the other hand, also accorded tax

exemption to church properties, but only to those which were

devoted to "charitable uses." Id. at 375. Thus, there has historically been some examination of a property's actual use, 40 No. 2020AP2007

not just reliance on an organization's religious character. In

other words, courts have long placed import on what a religious

organization does, and not just on what it says.

¶90 As these exemptions evolved, statutory language

likewise focused on an organization's "purpose." Indeed, from

the earliest statutory enactments regarding tax exemption for

religious entities, an examination of an organization's

activities has been part and parcel of the inquiry.

¶91 For instance, the Wilson-Gorman Tariff Act of 1894,

one of the earliest tax statutes that referenced an exemption

for religious purposes, provided a tax exemption to a flat

income tax. It stated:

"[N]othing herein contained shall apply to . . . corporations, companies, or associations organized and conducted solely for charitable, religious, or educational purposes, including fraternal beneficiary associations." Though the law was declared unconstitutional by the Supreme Court in 1895, the exemption language contained in the act would provide the cornerstone for tax legislation involving charitable organizations for the next century. Paul Arnsberger, et al., A History of the Tax-Exempt Sector: An

SOI Perspective, IRS Stat. of Income Bull. 105, 106-07 (Winter

2008), www.irs.gov/pub/irs-soi/tehistory.pdf. Similarly, a

subsequent enactment, the Revenue Act of 1909, granted exemption

to "any corporation or association organized and operated

exclusively for religious, charitable, or educational purposes,

no part of the net income of which inures to the benefit of any

41 No. 2020AP2007

private stockholder or individual." Id. at 107 (emphasis

added).

¶92 The ubiquity of religious tax exemptions and the

analytical consequences of such exemptions have been recognized

by the United States Supreme Court. Specifically, the Walz

Court observed that "Congress, from its earliest days, has

viewed the Religion Clauses of the Constitution as authorizing

statutory real estate tax exemption to religious bodies," noting

several examples from the early 1800's. Walz, 397 U.S. at 677.

As stated above, however, the Walz court also emphasized that

"some degree of involvement" with religion is a necessary

consequence of offering tax exemption to religious entities.

Id. at 674.

¶93 Tax exemptions for entities with a religious "purpose"

being well-established in historical enactments, it is paramount

that there be a mechanism for determining if an organization

qualifies. See Ecclesiastical Order of Ism of Am, Inc. v.

Chasin, 653 F. Supp. 1200, 1205 (E.D. Mich. 1986) ("Without [an examination of religious activities], it would be difficult to

see how any church could qualify as a tax exempt organization

'for religious purposes.'"). Such an endeavor inherently

requires judicial inquiry and has on many occasions throughout

the history of both federal and state law resulted in denial of

42 No. 2020AP2007

tax exemption where religion is claimed as the basis of the

exemption.19

¶94 For the above reasons, we conclude that CCB and the

sub-entities have failed to demonstrate beyond a reasonable

doubt an unconstitutional entanglement with religion. The

motivations and activities framework dictated by the language of

Wis. Stat. § 108.02(15)(h)2. does not require the court to stray

from a neutral and secular inquiry to an impermissible

examination of religious dogma.

¶95 CCB and the sub-entities contend next that LIRC's

interpretation violates the church autonomy principle. Namely,

they argue that the church autonomy principle is violated

because LIRC's interpretation penalizes the choice CCB made to

structure itself and its sub-entities as corporations separate

from the church itself. CCB and the sub-entities advance that

the church autonomy principle is violated by "divid[ing] up

religious bodies according to secular principles." They point

See, e.g., Gibbons v. District of Columbia, 116 U.S. 404, 19

407 (1886); All Saints Par. v. Inhabitants of Town of Brookline, 59 N.E. 1003, 1004 (Mass. 1901); Trinity Church v. City of New York, 10 How. Pr. 138, 140-41 (N.Y. Sup. Ct. 1854); In re City of Pawtucket, 52 A. 679, 679 (R.I. 1902); Frederick Cnty. Comm'rs v. Sisters of Charity of Saint Joseph, 48 Md. 34, 43 (Md. 1878); see also Waushara County v. Graf, 166 Wis. 2d 442, 462-63, 480 N.W.2d 16 (1992); Midtown Church of Christ, Inc. v. City of Racine, 83 Wis. 2d 72, 73-74, 264 N.W.2d 281 (1978); John W. Whitehead, Tax Exemption and Churches: A Historical and Constitutional Analysis, 22 Cumb. L. Rev. 521, 545 n.184 (1992) (collecting cases both upholding and disallowing property tax exemptions for churches and other religious organizations).

43 No. 2020AP2007

to Kedroff, 344 U.S. 94, to assert that the government is

thereby "interfering with the Church's internal governance,"

which adversely affects the faith and mission of the church

itself.

¶96 Kedroff illustrates the type of ecclesiastical

governance matters protected by the church autonomy principle.

At issue in Kedroff was an inter-church controversy over the

right to use a Russian Orthodox cathedral in New York City. Id.

at 96-97. The controversy arose between the North American

Russian Orthodox churches, which claimed the right to use the

cathedral belonged to an archbishop elected by them, and the

Supreme Court Authority, which claimed the right belonged

instead to an archbishop appointed by the patriarch in Moscow.

Id. New York's highest court ruled in favor of the North

American churches, based on a state law requiring every Russian

Orthodox church in New York to recognize the determination of

the governing body of the North American churches as

authoritative. Id. at 99 n.3. ¶97 The Kedroff Court concluded that the state statute at

issue was unconstitutional because it allowed the "power of the

state into the forbidden area of religious freedom contrary to

the principles of the First Amendment" by "displac[ing] one

church administrator with another . . . [thereby] pass[ing] the

control of matters strictly ecclesiastical from one church

authority to another." Id. at 119. The right to acquire the

cathedral was determined to be "strictly a matter of ecclesiastical government." Id. at 115. 44 No. 2020AP2007

¶98 In contrast to the New York statute at issue in

Kedroff, Wis. Stat. § 108.02(15)(h)2. neither regulates internal

church governance nor mandates any activity.

Section 108.02(15)(h)2. defines what employment is for the

purposes of unemployment insurance without reference to any

religious principles or any attempt to control internal church

operations. Put simply, it does not concern matters that are

"strictly" or even remotely "ecclesiastical," which belong to

the church alone. See id.

¶99 CCB and the sub-entities claim that viewing their

motives and activities separate from those of the church

penalizes their "choice to be 'structured as separate

corporations'——a religious decision grounded in church polity

and internal governance." On the contrary, the claim that in

order to receive the exemption the church is now required to

structure itself as a single entity rather than separately

incorporated subsidiaries is unpersuasive. The statute at issue

dictates that it is the motivation and activities of the non- profit that determine its tax-exempt status, not its corporate

structure.

¶100 It is not difficult to imagine a non-profit

organization structured as a separate sub-entity of a church

that is "operated primarily for religious purposes," that is,

with both motivations and activities that are religious. For

example, if one of the religiously-motivated sub-entities in

this case partook in activities such as those cited by the Dykema court as indicative of a religious purpose, see supra, 45 No. 2020AP2007

¶55, it would have a stronger argument that, despite being

incorporated separately from a religious institution, it is

nevertheless "operated primarily for religious purposes" within

the meaning of Wis. Stat. § 108.02(15)(h)2.20 Thus, CCB and the

sub-entities have failed to demonstrate that the church autonomy

principle has been violated beyond a reasonable doubt because

the statute does not interfere with its internal governance or

any ecclesiastical matters.

¶101 Next, CCB and the sub-entities claim that LIRC's

proposed interpretation as applied to them abandons "[the]

bedrock principle of neutrality among religions" and violates

the Free Exercise Clause in at least two ways. First, CCB and

the sub-entities advance that it violates the principle of

neutrality because "it discriminates against religious entities

with a more complex polity." In other words, CCB and the sub-

entities contend that the Catholic Church is penalized under

LIRC's interpretation for "organizing itself as a group of

See also Schwartz v. Unemployment Ins. Comm'n, 895 A.2d 20

965, 970 (Me. 2006) (concluding that a nonprofit organization which, in part, provides healthcare to island communities, is operated primarily for religious purposes because of its religious motivations and activities including bringing pastors to island communities, offering Christmas programs, and employing clergy members); Peace Lutheran Church v. State, Unemployment Appeals Comm'n, 906 So. 2d 1197, 1199-1200 (Fla. Dist. Ct. App. 2005) (determining that a child care center located at a church was operated primarily for religious purposes because it provided outreach for the church and its "religious purposes pervade all aspects of the school/day care center.").

46 No. 2020AP2007

separate corporate bodies——in contrast to other religious

entities that include a variety of ministries as part of a

single incorporated or unincorporated body."

¶102 Second, CCB and the sub-entities claim that LIRC's

interpretation is not neutral because it penalizes them "for

[their] Catholic beliefs regarding how [they] must serve those

most in need." They point to LIRC's and the court of appeals'

decisions as "identifying [certain21] characteristics of CCB's

ministry as factors favoring denial of an otherwise-available

exemption." Such an interpretation, in the petitioners' view,

"flies in the face of Catholic beliefs about care for the poor"

and "favors religious groups that require those they serve to

adhere to the faith of that group or be subject to

proselytization."

¶103 As a threshold matter, a party making a free exercise

challenge must demonstrate that the challenged law burdens their

religious exercise in a constitutionally significant way.

"[T]he Free Exercise Clause does not require an exemption from a governmental program unless, at a minimum, inclusion in the

program actually burdens the claimant's freedom to exercise

religious rights." Tony and Susan Alamo Found. v. Sec'y of

21LIRC and the court of appeals observe that CCB does not engage in any of the following activities: inculcating Catholic faith; teaching the Catholic religion; evangelizing or participating in religious rituals or worship services; requiring employees, participants or board members to be of Catholic faith; requiring attendance at religious training, orientation, or services; and disseminating religious materials.

47 No. 2020AP2007

Labor, 471 U.S. 290, 303 (1985); see also Sch. Dist. of Abington

Twp., 374 U.S. at 223 ("[I]t is necessary in a free exercise

case for one to show the coercive effect of the enactment as it

operates against him in the practice of his religion."). If

such a burden has been shown, then the analysis proceeds to the

second step, where a party may carry its burden of proving a

free exercise violation by showing that a governmental entity

has burdened a sincere religious practice pursuant to a policy

that is not "neutral" or "generally applicable." Bremerton, 507

U.S. at 525.

¶104 Importantly for our Free Exercise analysis, LIRC

asserts that CCB and the sub-entities have not shown that "the

unemployment insurance system burdens their religious beliefs."

In LIRC's view, "[i]nclusion in the unemployment program is not

a constitutionally significant burden." LIRC's argument

continues: "The commission's interpretation does not prohibit

the Diocese or the employers from engaging in any activity. The

employers have participated in the State unemployment insurance program for many years and do not contend that their

participation was a significant or substantial burden on their

religious practices or beliefs."

¶105 A look to United States Supreme Court precedent

illustrates that LIRC's position is correct. "[T]o the extent

that imposition of a generally applicable tax merely decreases

the amount of money appellant has to spend on its religious

activities, any such burden is not constitutionally significant." Jimmy Swaggart Ministries v. Bd. of Equalization 48 No. 2020AP2007

of Cal., 493 U.S. 378, 391 (1990). "[T]he very essence of such

a tax is that it is neutral and nondiscriminatory on questions

of religious belief." Id. at 394; see Hernandez v. Comm'r of

Internal Revenue, 490 U.S. 680, 699-700 (1989) (concluding that

the burden imposed by a provision of the Internal Revenue Code

governing charitable deduction was "no different from that

imposed by any public tax or fee" and that even a "substantial

burden would be justified by the 'broad public interest in

maintaining a sound tax system,' free of 'myriad exceptions

flowing from a wide variety of religious beliefs.'") (quoted

source omitted); accord Coulee Cath. Schs., 320 Wis. 2d 275, ¶65

("General laws related to building licensing, taxes, social

security, and the like are normally acceptable.").

¶106 Such is the nature of the unemployment tax at issue

here. CCB and the sub-entities have not identified how the

payment of unemployment tax prevents them from fulfilling any

religious function or engaging in any religious activities. As

the United States Supreme Court said, the decrease in the money available for religious or charitable activities that comes with

paying a generally applicable tax is not a constitutionally

significant burden. Jimmy Swaggart Ministries, 493 U.S. at 391.

CCB and the sub-entities thus cannot surmount the threshold

inquiry to demonstrate a Free Exercise violation. Because CCB

and the sub-entities have failed to demonstrate that the statute

imposes a constitutionally significant burden on their religious

practice, we need not address the petitioners' argument that the statute violates principles of neutrality. 49 No. 2020AP2007

¶107 Accordingly, we conclude that CCB and the sub-entities

have therefore not met their burden under their Free Exercise

claim to show that the law as-applied to them is

unconstitutional beyond a reasonable doubt.22

V

¶108 In sum, we determine that in our inquiry into whether

an organization is "operated primarily for religious purposes"

organization. Applying this analysis to the facts before us, we

religious purposes within the meaning of § 108.02(15)(h)2. We

further conclude that the application of § 108.02(15)(h)2. as

applied to the petitioners does not violate the First Amendment

¶109 Accordingly, we affirm the decision of the court of appeals.

By the Court.—The decision of the court of appeals is

affirmed.

22To the extent that CCB and the sub-entities argue that Wis. Stat. § 108.02(15)(h)2. is facially unconstitutional, such a challenge also fails. For a facial challenge to be successful, it must be demonstrated that the law cannot be constitutionally enforced under any circumstances. Roundtree, 395 Wis. 2d 94, ¶17. Our conclusion that § 108.02(15)(h)2. can be constitutionally enforced under the present circumstances necessarily precludes such an argument.

50 No. 2020AP2007.rgb

¶110 REBECCA GRASSL BRADLEY, J. (dissenting).

"Render therefore unto Caesar the things which are Caesar's; and unto God the things that are God's."

Matthew 22:21 (King James).

¶111 The State of Wisconsin gives a tax exemption to any

nonprofit organization "operated primarily for religious

purposes and operated . . . by a church . . . ." Wis. Stat. §

108.02(15)(h)2. Catholic Charities Bureau, Inc. and four of its

sub-entities (collectively, "Catholic Charities") are operated

primarily for a religious purpose——fulfillment of the command of

Jesus Christ himself to serve others——and operated by the Roman

Catholic Diocese of Superior, Wisconsin. The majority rewrites

the statute to deprive Catholic Charities of the tax exemption,

rendering unto the state that which the law says belongs to the

church.

¶112 Impermissibly entangling the government in church

doctrine, the majority astonishingly declares Catholic Charities

are not "operated primarily for religious purposes" because

their activities are not "religious in nature." Majority op.,

¶60. The statute, however, requires only that a nonprofit be

operated primarily for a religious reason. "The statute is

neutral as to the type of service an organization provides; it

speaks only in terms of the purpose of the organization."

Cathedral Arts Project, Inc. v. Dep't of Econ. Opportunity, 95

So. 3d 970, 975 (Fla. Dist. Ct. App. 2012) (Swanson, J., dissenting in part, and dissenting from the judgment). 1 No. 2020AP2007.rgb

¶113 The majority's misinterpretation of the exemption

renders the statute in violation of the First Amendment of the

United States Constitution as well as the Wisconsin

Constitution. By focusing on whether a nonprofit primarily

engages in activities that are "religious in nature," the

majority transforms a broad exemption into a denominational

preference for Protestant religions and a discriminatory

exclusion of Catholicism, Judaism, Islam, Sikhism, Hinduism,

Buddhism, Hare Krishna, and the Church of Latter Day Saints,

among others. The First Amendment forbids the government from

such religious discrimination and commands neutrality among

religions in the provision or denial of a government benefit.

¶114 The majority's misinterpretation also excessively

entangles the government in spiritual affairs, requiring courts

to determine what religious practices are sufficiently religious

under the majority's unconstitutional test. The majority says

secular entities provide charitable services, so such activities

aren't religious at all, even when performed by Catholic Charities. The majority's determination directly contradicts

Catholic Charities' faith:

The [Catholic] Church's deepest nature is expressed in her three-fold responsibility: of proclaiming the word of God (kerygma-martyria), celebrating the sacraments (leitourgia), and exercising the ministry of charity (diakonia). These duties presuppose each other and are inseparable. For the Church, charity is not a kind of welfare activity which could equally well be left to others, but is a part of her nature, an indispensable expression of her very being.

2 No. 2020AP2007.rgb

Pope Benedict XVI, Deus Caritas Est, ¶25 (2005).1 Courts should

be uncomfortable judging matters of faith. Not only does the

constitution forbid the exercise, but courts are susceptible to

mischaracterizing deeply religious activities, which for some

faith traditions include dancing, Bhakti-yoga, and sharing a

meal, as amicus curiae, International Society for Krishna

Consciousness and the Sikh Coalition, informs this court. The

majority instead looks through a seemingly Protestant lens to

deem works of charity worthy of the exemption only if

accompanied by proselytizing——a combination forbidden by

Catholicism, Judaism, and many other religions.2

¶115 The majority mangles Wis. Stat. § 108.02(15)(h)2. to

reflect its policy preferences, supplanting the law actually

enacted by the people's representatives in the legislature. The

majority's activism renders the exemption unconstitutional. I

dissent.3

https://www.vatican.va/content/benedict- 1

xvi/en/encyclicals/documents/hf_ben-xvi_enc_20051225_deus- caritas-est.html.

Amicus Br. Professors Douglas Laycock & Thomas C. Berg, at 2

15-16 (internal citations omitted) ("Many evangelical Christians view conversion and overt worship as indispensable elements of their charitable activities. But Catholics and Jews view service itself as a distinct mode of worship that should remain separate from proselytizing.").

Continuing its telling trend, the majority refuses to 3

address any arguments against its desired result. Clarke v. Wis. Elections Comm'n, 2023 WI 79, ¶206, 410 Wis. 2d 1, 998 N.W.2d 370 (Rebecca Grassl Bradley, J., dissenting) (noting the majority "pretend[ed] the respondents made an argument that [was] easier for the majority to dismiss" instead of addressing the parties' actual argument). This dissent details the majority's analytical blunders, which lead the majority to absurdly conclude Catholic Charities are purely secular. 3 No. 2020AP2007.rgb

I. BACKGROUND

¶116 Every Roman Catholic diocese in Wisconsin has a

Catholic Charities entity, which is its social ministry arm.

Catholic Charities Bureau, Inc. (CCB) is the Catholic Charities

entity for the Diocese of Superior, Wisconsin. The purpose of

CCB "is to be an effective sign of the charity of Christ" by

providing services according to an "[e]cumenical orientation,"

meaning the organization makes no distinction on the basis of

race, sex, or religion regarding those served, employed, or who

serve on its board. CCB has separately incorporated sub-

entities, four of which are parties in this dispute. The bishop

of the Diocese of Superior oversees CCB's programs and services

Justice Brian Hagedorn also dissents, questioning why the majority reads the exemption narrowly in the face of constitutionally protected religious freedom. If the majority sincerely stands behind its analysis, it should explain where the dissents go astray. As Justice Antonin Scalia put it,

When I have been assigned the opinion for the Court in a divided case, nothing gives me as much assurance that I have written it well as the fact that I am able to respond satisfactorily (in my judgment) to all the onslaughts of the dissents or separate concurrences. The dissent or concurrence puts my opinion to the test, providing a direct confrontation of the best arguments on both sides of the disputed points. It's a cure for laziness, compelling me to make the most of my case.

Antonin Scalia, The Dissenting Opinion, 1994 J. Sup. Ct. Hist. 33, 41 (1994). Pitifully, the majority does not make the most of its case. Generally, when a party fails to respond to the legal arguments advanced in a case, the court considers the arguments conceded. United Coop. v. Frontier FS Coop., 2007 WI App 197, ¶39, 304 Wis. 2d 750, 738 N.W.2d 578 (citing Schlieper v. DNR, 188 Wis. 2d 318, 322, 525 N.W.2d 99 (Ct. App. 1994)). By refusing to offer a word of rebuttal in response to the dissents, the majority concedes its analysis lacks legal merit.

4 No. 2020AP2007.rgb

and is in charge of Catholic Charities. It is uncontested that

Catholic Charities are operated for a religious reason.

¶117 In 2016, Catholic Charities asked to withdraw from the

Wisconsin unemployment tax system. The Department of Workforce

Development (DWD) denied the request. Catholic Charities

appealed, and an administrative law judge reversed DWD's

decision. The Labor and Industry Review Commission (LIRC)

reversed the administrative law judge's decision.

¶118 LIRC determined Catholic Charities are not "operated

primarily for religious purposes" under Wis. Stat.

§ 108.02(15)(h)2. LIRC decided "[t]he activities, not the

religious motivation behind them or the organization's founding

principles, determine whether an exemption from participation in

the unemployment insurance program is warranted." Although

"[Catholic Charities'] services may be religiously motivated and

manifestations of religious belief," LIRC decided Catholic

Charities' activities are not "religious per se." LIRC

determined "the provision of help to the poor and disabled" is "essentially secular," and therefore denied Catholic Charities

the exemption. The circuit court reversed LIRC's decision. The

court of appeals then reversed the circuit court.

¶119 The court of appeals decided Catholic Charities do not

operate primarily for religious purposes——holding that Catholic

Charities' activities are not sufficiently "viewed

as . . . inherently religious." Cath. Charities Bureau, Inc. v.

LIRC, 2023 WI App 12, ¶45, 406 Wis. 2d 586, 987 N.W.2d 778. The court of appeals held that to receive the exemption under Wis.

5 No. 2020AP2007.rgb

Stat. § 108.02(15)(h)2., Catholic Charities must have a

religious motivation and engage primarily in activities

"religious in nature." Id., ¶34. According to the court of

appeals, "a religious motivation does not, by itself, mean that

the organization is operated primarily for religious purposes."

Id., ¶62. It is "the type of religious activities engaged in by

the organization" that determines its eligibility for the

exemption. Id., ¶45. The court of appeals acknowledged

Catholic Charities have a religious motivation for conducting

their charitable activities. Id., ¶¶56-57. Nevertheless, the

court of appeals decided Catholic Charities' charitable

activities "are neither inherently or primarily religious

activities":

CCB and its sub-entities do not operate to inculcate the Catholic faith; they are not engaged in teaching the Catholic religion, evangelizing, or participating in religious rituals or worship services with the social service participants; they do not require their employees, participants, or board members to be of the Catholic faith; participants are not required to attend any religious training, orientation, or services; their funding comes almost entirely from government contracts or private companies, not from the Diocese of Superior; and they do not disseminate any religious material to participants. Nor do CCB and its sub-entities provide program participants with an "education in the doctrine and discipline of the church." Id., ¶58 (quoting United States v. Dykema, 666 F.2d 1096, 1100

(7th Cir. 1981)). "While [Catholic Charities'] activities

fulfill the Catechism of the Catholic Church to respond in

charity to those in need, the activities themselves are not primarily religious in nature." Id., ¶59. The court of appeals

6 No. 2020AP2007.rgb

held any "spreading of [the] Catholic faith accomplished" by

Catholic Charities' activities is only "indirect." Id., ¶61.

The court of appeals concluded that although "the Catholic

Church's tenet of solidarity compels it to engage in charitable

acts, the religious motives of CCB and its sub-entities appear

to be incidental to their primarily charitable functions." Id.,

¶62.

II. STATUTORY INTERPRETATION

¶120 The Wisconsin Unemployment Compensation Act provides

temporary benefits to eligible unemployed workers. Employers

contribute to a government account via a tax. In 1972, the

state exempted certain religious nonprofits from paying the tax.

See ch. 53, Laws of 1971. Currently, the law says,

"'Employment' as applied to work for a nonprofit organization .

. . does not include service . . . [i]n the employ of an

organization operated primarily for religious purposes and

operated, supervised, controlled, or principally supported by a

church or convention or association of churches[.]" Wis. Stat. § 108.02(15)(h)2.

¶121 To receive an exemption under Wis. Stat. §

108.02(15)(h)2., a nonprofit must meet two requirements: (1)

the organization must be "operated primarily for religious

purposes" and (2) the organization must be "operated,

supervised, controlled, or principally supported by a church or

convention or association of churches[.]"4 The parties agree

Cf. St. Martin Evangelical Lutheran 4 Church v. South Dakota, 451 U.S. 772, 782 n.12 (1981).

7 No. 2020AP2007.rgb

Catholic Charities are "operated, supervised, controlled, or

principally supported by a church." The parties dispute whether

Catholic Charities are "operated primarily for religious

purposes." An examination of the statute's language

unencumbered by the majority's policy agenda shows Catholic

Charities are operated for religious purposes and entitled to

the exemption.

¶122 The goal of statutory interpretation is to ascertain a

law's objective meaning. State ex rel. Kalal v. Cir. Ct. for

Dane Cnty., 2004 WI 58, ¶47, 271 Wis. 2d 633, 681 N.W.2d 110

(quoting Bruno v. Milwaukee Cnty., 2003 WI 28, ¶25, 260 Wis. 2d

633, 660 N.W.2d 656); see Friends of Black River Forest v.

Kohler Co., 2022 WI 52, ¶39, 402 Wis. 2d 587, 977 N.W.2d 342

(stating the Kalal framework involves "ascertaining statutory

meaning," not what the legislature or "statute 'intended'").

Courts are supposed to focus on the text of the statute to

derive "the fair meaning [from] the text itself." Brey v. State

Farm Mut. Auto. Ins. Co., 2022 WI 7, ¶11, 400 Wis. 2d 417, 970 N.W.2d 1 (citing Kalal, 271 Wis. 2d 633, ¶¶46, 52); Friends of

Black River Forest, 402 Wis. 2d 587, ¶28 n.13 (In a "textually

driven analysis . . . the language of the cited statutes drives

the inquiry . . . ."). "Statutory language is given its common,

ordinary, and accepted meaning, except that technical or

specially-defined words or phrases are given their technical or

special definitional meaning." Kalal, 271 Wis. 2d 633, ¶45

(citations omitted); see also Wis. Stat. § 990.01(1). If a

8 No. 2020AP2007.rgb

statute's meaning is plain, the interpretive process ends.

Kalal, 271 Wis. 2d 633, ¶45 (citations omitted).

¶123 To determine the meaning of a statute, this court

consults the text, context, and structure of the statute. Brey,

400 Wis. 2d 417, ¶11 (citing Milwaukee Dist. Council 48 v.

Milwaukee Cnty., 2019 WI 24, ¶11, 385 Wis. 2d 748, 924 N.W.2d

153). Canons of construction, dictionaries, and the rules of

grammar "serve as 'helpful, neutral guides'" to determine a

statute's meaning. James v. Heinrich, 2021 WI 58, ¶23 n.12, 397

Wis. 2d 517, 960 N.W.2d 350 (quoting Antonin Scalia & Bryan A.

Garner, Reading Law: The Interpretation of Legal Texts 61

(2012)); State v. Sample, 215 Wis. 2d 487, 499, 573 N.W.2d 187

(1998) (first citing Wis. Stat. § 990.01(1); and then citing

Swatek v. Cnty. of Dane, 192 Wis. 2d 47, 61, 531 N.W.2d 45

(1995)) ("For purposes of statutory interpretation or

construction, the common and approved usage of words may be

established by consulting dictionary definitions."); Scalia &

Garner, supra, at 140 ("Words are to be given the meaning that proper grammar and usage would assign them."); Neil M. Gorsuch,

A Republic, If You Can Keep It 132 (2019) (noting the rules of

grammar "play no favorites" in statutory interpretation).

Application of the traditional tools of statutory interpretation

inexorably leads to the unremarkable conclusion that a nonprofit

is "operated primarily for religious purposes" if it is managed

primarily for religious reasons. Ascertaining the meaning of

the religious exemption's first requirement ("operated primarily

9 No. 2020AP2007.rgb

for religious purposes") requires a proper understanding of two

words——"operated" and "purposes."

A. Operated

¶124 LIRC argues the word "operated" means "to work,

perform, or function." According to LIRC, the word "operate"

"connotes" activity. The majority agrees. Majority op., ¶42.

Catholic Charities argue the word means "managed" or "used." A

textual analysis reveals the word "operated," as used in Wis.

Stat. § 108.02(15)(h)2., means "managed." Basic grammar

verifies the correctness of this interpretation.

¶125 "Although drafters, like all other writers and

speakers, sometimes perpetrate linguistic blunders, they are

presumed to be grammatical in their compositions. They are not

presumed to be unlettered." Scalia & Garner, supra, at 140

(footnotes omitted). Courts are supposed to prefer

interpretations in accord with the rules of grammar over non-

grammatical readings. See Indianhead Motors v. Brooks, 2006 WI

App 266, ¶9, 297 Wis. 2d 821, 726 N.W.2d 352 (rejecting an interpretation that "defie[d] the rules of grammar"). The word

"operated" appears twice in Wis. Stat. § 108.02(15)(h)2. Each

10 No. 2020AP2007.rgb

time, "operated" is a transitive verb,5 taking the word

"organization" as its direct object. "Operated" should be

interpreted in its transitive sense. See State ex rel. DNR v.

Wis. Ct. of Appeals, Dist. IV, 2018 WI 25, ¶29, 380 Wis. 2d 354,

909 N.W.2d 114. "Managed" is a common definition of "operated"

when used as a transitive verb. E.g., Operate, The Random House

Dictionary of the English Language 1009 (1st unabridged ed.

1966) (defining "operate" in the transitive sense as "[t]o

manage or use"; "[t]o put or keep . . . working or in

operation"; and "[t]o bring about out, effect, or produce, as by

action or the exertion of force or influence"). Other textual

clues confirm "operated" means "managed."

¶126 The whole text of Wis. Stat. § 108.02(15)(h)2. must be

considered when interpreting the word "operated." "Statutory

interpretation centers on the 'ascertainment of meaning,' not

the recitation of words in isolation." Brey, 400 Wis. 2d 417,

¶13 (citation omitted). "Context is a primary determinant of

meaning." Scalia & Garner, supra, at 167; see Clarke v. Wis.

5 In its brief, LIRC insists "operated" is an intransitive verb with no direct object. The majority agrees, citing internet dictionary definitions of "operate" in the intransitive sense. See majority op., ¶42. LIRC and the majority are wrong; "operated" is a transitive verb in Wis. Stat. § 108.02(15)(h)2. It is the "organization"——the direct object——that is "operated"— —transitive verb——"primarily for religious purposes" and "operated"——transitive verb——"by a church or convention or association of churches[.]" § 108.02(15)(h)2. Section 108.02(15)(h)2. has a passive construction. See generally Bryan A. Garner, Garner's Modern English Usage 676 (4th ed. 2016). "[O]nly transitive verbs can appear in the passive voice." C. Edward Good, A Grammar Book for You and I . . . Oops, Me! 33 (2002).

11 No. 2020AP2007.rgb

Elections Comm'n, 2023 WI 79, ¶198, 410 Wis. 2d 1, 998 N.W.2d

370 (Rebecca Grassl Bradley, J., dissenting) (citing Towne v.

Eisner, 245 U.S. 418, 425 (1918)). The word "operated" is used

twice in § 108.02(15)(h)2.: "operated primarily for religious

purposes and operated, supervised, controlled, or principally

supported by a church or convention or association of

churches[.]" (Emphasis added.) "[A]bsent textual or structural

clues to the contrary[,]" we presume a word used multiple times

in a statute bears the same meaning throughout. DNR, 380 Wis.

2d 354, ¶30 (citations omitted); DaimlerChrysler v. LIRC, 2007

WI 15, ¶29, 299 Wis. 2d 1, 727 N.W.2d 311 (quoting Harnischfeger

Corp. v. LIRC, 196 Wis. 2d 650, 663, 539 N.W.2d 98 (1995)) ("It

is a basic rule of construction that we attribute the same

definition to a word both times it is used in the same statute

or administrative rule."). The text and structure of

§ 108.02(15)(h)2. confirm the word "operated" bears the same

meaning in both uses. Section 108.02(15)(h)2. uses the word

"operated" twice within the same sentence, providing strong evidence the word means the same thing in both instances. Miss.

ex rel. Hood v. AU Optronics Corp., 571 U.S. 161, 171 (2014)

(quoting Brown v. Gardner, 513 U.S. 115, 118 (1994)) ("[T]he

'presumption that a given term is used to mean the same thing

throughout a statute' is 'at its most vigorous when a term is

repeated within a given sentence.'"). Additionally, the word

"operated" is a transitive verb in both uses, sharing the same

direct object: "organization." It is not credible that the word "operated," which is used twice in the same sentence,

12 No. 2020AP2007.rgb

sharing the same direct object, means something different in

each use. See United States v. Cooper Corp., 312 U.S. 600, 606

(1941) ("It is hardly credible that Congress used the term

'person' in different senses in the same sentence.").

¶127 In its second appearance in Wis. Stat.

§ 108.02(15)(h)2., the word "operated" is followed by the verbs

"supervised, controlled, [and] principally supported." It is a

basic principle of statutory interpretation that the meaning of

words should be understood "by reference to their relationship

with other associated words or phrases." State v. Popenhagen,

2008 WI 55, ¶46 n.25, 309 Wis. 2d 601, 749 N.W.2d 611. When

words "are associated in a context suggesting that the words

have something in common, they should be assigned a permissible

meaning that makes them similar. The [associated-words canon]

especially holds that 'words grouped in a list should be given

related meanings.'" Scalia & Garner, supra, at 195 (citing

Third Nat'l Bank in Nashville v. Impac Ltd., Inc., 432 U.S. 312,

322 (1977)). "Managed" is a definition of "operated" that works for both uses of the word "operated" in the statute, and

"managed" has a related meaning to "supervised, controlled,

[and] principally supported." § 108.02(15)(h)2. The majority's

proffered interpretation of "operated"——"to work, perform, or

function, as a machine does[,]" majority op., ¶42 (quoted source

omitted)——is utterly unlike "supervised, controlled, [and]

principally supported." § 108.02(15)(h)2. Because "operated"

means "managed" in its second appearance, it most likely means "managed" in its first appearance as well.

13 No. 2020AP2007.rgb

¶128 The text, its context, and the canons of construction

all support the conclusion that "operated" means "managed" in

Wis. Stat. § 108.02(15)(h)2. The definition of "operated"

advanced by LIRC and adopted by the majority simply does not

work. Both define "operated" to mean "to work, perform, or

function . . . ." Majority op., ¶42 (citations omitted). Both

treat "operated" as a synonym for the word "activity"——an

interpretation unsupported by the statutory text. Treating

"operated" as a stand in for the noun "activity" either assigns

"operated" two different senses in the same sentence, or gives

"operated" a meaning oddly dissimilar to the words surrounding

it in its second use. See § 108.02(15)(h)2. (requiring the

nonprofit to be "operated, supervised, controlled, or

principally supported by a church or convention or association

of churches"). Additionally, defining "operated" to mean

"activity" transmogrifies a verb, "operated," into a noun,

"activity." The majority's interpretation of "operated"

violates the "fundamental rule of textual interpretation . . . that neither a word nor a sentence may be

given a meaning that it cannot bear." Scalia & Garner, supra,

at 31.

B. Purposes

¶129 The majority correctly concludes the word "purposes"

means the reasons for which something is done. Majority op.,

¶43 (quoting Purpose, https://www.dictionary.com/browse/purpose

(last visited Feb. 27, 2024)); purpose, The Random House Dictionary of the English Language 1167 (1st unabridged ed.

14 No. 2020AP2007.rgb

1966) (defining "purpose" as "the reason for which something

exists or is done, made, used, etc."); see also Brown Cnty. v.

Brown Cnty. Taxpayers Ass'n, 2022 WI 13, ¶38, 400 Wis. 2d 781,

971 N.W.2d 491 (internal quotation marks omitted) (quoting

Purpose, Merriam-Webster Online Dictionary, https://www.merriam-

webster.com/dictionary/purpose (last visited Feb. 14, 2022))

(the "common definition" of "purpose" is "the reason why

something is done or used" or "the aim or intention of

something"). To be "primarily operated for religious purposes,"

the nonprofit must be managed primarily for a religious reason.

¶130 LIRC resists this common-sense understanding of

"purposes," insisting "purposes" means "[t]he employers'

business activity, objectives, goals and ends." LIRC argues

this court should not consider the reasons why a nonprofit is

operated. LIRC cites a legal dictionary——purpose, Black's Law

Dictionary 1493 (11th ed. 2019)——for its conclusion that

"purposes" means "business activity." Because "purposes" is an

ordinary term,6 however, we should use ordinary dictionaries to

In its brief, LIRC tepidly argues the term "religious 6

purposes" is a term of art in tax law, citing United States v. Dykema, 666 F.2d 1096 (7th Cir. 1981). The majority gestures at (but does not commit to) the same argument, likewise relying on Dykema. Majority op., ¶54. While Dykema deemed "religious purposes" a "term of art in tax law," 666 F.2d at 1101, it did not cite any authority to support its contention; it also failed to explain why it believed the phrase is a term of art. No cases support Dykema's assertion; only two parroted it. The only cases to treat "religious purposes" as a term of art are Dykema, 666 F.2d at 1101, Living Faith, Inc. v. Commissioner, 950 F.2d 365, 376 (7th Cir. 1991), which cited Dykema, and Catholic Charities Bureau, Inc. v. LIRC, 2023 WI App 12, ¶39, 406 Wis. 2d 586, 987 N.W.2d 778, the court of appeals decision in this case, which cited only Dykema. In reaching its conclusion, the Dykema court interpreted 26 U.S.C. § 501(c)(3), 15 No. 2020AP2007.rgb

aid our search for its meaning. See Sanders v. State of Wis.

Claims Bd., 2023 WI 60, ¶14, 408 Wis. 2d 370, 992 N.W.2d 126

(lead opinion) (internal citations omitted) ("To determine

common and approved usage, we consult dictionaries. To

determine the meaning of legal terms of art, we consult legal

dictionaries."); see majority op., ¶43 (quoted source omitted).

Unless a word or phrase is a legal term of art or statutorily

defined, words and phrases are given their "common, ordinary,

and accepted meaning." Kalal, 271 Wis. 2d 633, ¶45. "Business

activity" is anything but the ordinary meaning of "religious

purposes." LIRC's assertion that "purposes" means "objectives,

goals and ends" does not logically lead to considering only

Catholic Charities' activities, much less whether those

activities are inherently religious. An objective, goal, or end

cannot be divorced from motives. "Purposes" means the reason

something is done, the motivation underlying the action. As a

matter of simple logic, "purposes" does not mean the action

which exempts entities operated exclusively for "religious, charitable, scientific, testing for public safety, literary, or educational purposes." Federal regulations undermine Dykema's characterization of "religious purposes" as a term of art. Regulations define what "charitable," "educational," "testing for public safety," and "scientific" mean. 26 C.F.R. § 1.501(c)(3)-1(d)(2)-(5). Conspicuously absent is any definition of what "religious" means under the statute. Dykema's representation that "religious purposes" is a term of art in tax law is also severely undermined by divergent interpretations of "operated primarily for religious purposes" embraced by state courts. See majority op., ¶38 n.10 (collecting a sample of cases). Neither Dykema, LIRC, nor the majority have provided any basis for construing "religious purposes" as a term of art.

16 No. 2020AP2007.rgb

C. Applying the Plain Meaning of Wis. Stat. § 108.02(15)(h)2.

¶131 As a matter of statutory construction, common usage of

ordinary terms, and basic grammar, "operated primarily for

religious purposes" means managed primarily for religious

reasons. See, e.g., Czigler v. Adm'r, Ohio Bureau of Emp.

Servs., 501 N.E.2d 56, 58 (Ohio Ct. App. 1985). No one disputes

that the only reason the Catholic Church operates Catholic

Charities is religious. See majority op., ¶59; see also Cath.

Charities Bureau, 406 Wis. 2d 586, ¶47 ("[N]either DWD nor this

court dispute that the Catholic Church holds a sincerely held

religious belief as its reason for operating CCB and its sub-

entities."). It's no surprise the issue is uncontested——

Catholic Charities' raison d'être is religious. A court must

accept a religious entity's good faith representations that

religious beliefs motivate an operation and the operation

furthers a religious mission. Holy Trinity Cmty. Sch., Inc. v.

Kahl, 82 Wis. 2d 139, 154-55, 262 N.W.2d 210 (1978); See United

States v. Lee, 455 U.S. 252, 257 (1982); Corp. of Presiding Bishop of Church of Jesus Christ of Latter-day Saints v. Amos,

483 U.S. 327, 342 (1987) (Brennan, J., concurring in the

judgment) ("Determining that certain activities are in

furtherance of an organization's religious

mission . . . is . . . a means by which a religious community

defines itself."); See also Kendall v. Dir. of Div. of Emp.

Sec., 473 N.E.2d 196, 199 (Mass. 1985); Hollis Hills Jewish Ctr.

v. Comm'r of Lab., 461 N.Y.S.2d 555, 556 (N.Y. App. Div. 1983) (stating that an employer's statement that its operation

17 No. 2020AP2007.rgb

furthers a religious objective, "made in good faith, must be

accepted by civil courts"). That should end the inquiry, and

Catholic Charities should receive the tax exemption. Regardless

of whose motivations are relevant——Catholic Charities' or the

Diocese of Superior's——Catholic Charities are managed primarily

for religious reasons.

D. Whose Purposes

¶132 Because it is undisputed that the only reason Catholic

Charities are operated is religious (no matter whose purposes

are relevant under Wis. Stat. § 108.02(15)(h)2.) the majority

need not decide whose purposes are relevant. Nevertheless, the

majority answers the question, botching the analysis. The

answer should be obvious from the statutory text: The purposes

of the entity that operates the nonprofit are the relevant

purposes under the statute. When trying to figure out why a

nonprofit exists, ask the manager, not those managed.

¶133 The majority comes to the opposite conclusion, deeming

the nonprofit's subjective motivations relevant. Majority op., ¶34. The majority's rationale is unconvincing. As a

preliminary matter, the majority relies on a false dichotomy.

The majority asks whether——in all cases——the analysis focuses on

the church's motivations or the nonprofit's motivations. See

id., ¶33. Not all cases, however, will present those two

options. The text of Wis. Stat. § 108.02(15)(h)2. indicates it

is the operator's motivations that are relevant. A nonprofit

could operate itself. Alternatively, a "church or convention or association of churches" could operate the nonprofit.

18 No. 2020AP2007.rgb

§ 108.02(15)(h)2. As a third option, a third party could

operate the nonprofit. The statute's language contemplates that

a nonprofit may be operated by a third party and the exemption

will be available if the nonprofit is "operated primarily for

religious purposes" and "supervised, controlled, or principally

churches[.]" § 108.02(15)(h)2.

¶134 With the majority's false dichotomy discredited, the

majority's conclusion collapses. There is no surplusage under a

textualist reading. When a church operates a nonprofit,

focusing on the church's motivations for doing so will not lead

to every religiously affiliated organization "automatically"

receiving an exemption because "[a] church's purpose is

religious by nature." See majority op., ¶37. When a nonprofit

is self-operated or operated by a third party other than a

church, the "operated primarily for religious purposes"

requirement still has force.7 The "operated primarily for

religious purposes" requirement is not "pointless," Scalia & Garner, supra, at 176, if the relevant motives are that of the

nonprofit's operator, which could be the nonprofit itself or a

third party other than a church. The surplusage canon applies

only if an interpretation renders a word or phrase meaningless

7The majority's surplusage argument is additionally flawed because it relies on the false assumption that a church's purposes are by definition religious. Id., ¶37. While that sounds reasonable, it is not universally true. Nothing precludes a church from taking an action for a nonreligious reason. Similarly, it is not true that a school's motivations are by definition educational.

19 No. 2020AP2007.rgb

or redundant. See id. That is not the case under a fair

reading of Wis. Stat. § 108.02(15)(h)2.

¶135 The majority also argues we should focus on the

nonprofit's motivations because the exemption relates to the

services of the employees of a nonprofit, not a church.

Majority op., ¶34.8 But whose services are exempt under the

statute does not indicate whose purposes are relevant under Wis.

Stat. § 108.02(15)(h)2. The majority's conclusion simply

doesn't follow from its premises. The majority persists with

its fallacious analysis, arguing the nonprofit's motivations are

always the relevant motivations because "the phrase 'operated

primarily for religious purposes' modifies the word

'organization,' not the word 'church'" in § 108.02(15)(h)2. Id.

No one denies it is the nonprofit that must be operated

primarily for religious purposes, not the church. But that

doesn't mean the nonprofit's motivations control the application

of the statute.

¶136 If (as the majority agrees) "purposes" means one's subjective reason for doing something, then in determining why a

nonprofit is being operated, it is the operator's motives that

matter. According to the majority, however, the court can

determine the subjective reason why a nonprofit is operated

without examining the motives of the entity operating the

8The majority similarly argues that "[t]hose employed by a church are . . . addressed in subdivisions 1. and 3. [of Wis. Stat. § 108.02(15)(h)], indicating . . . that 'employees who fall under subd. 2. are to be focused on separately in the statutory scheme from employees of a church.'" Id., ¶35 (quoting Cath. Charities Bureau, 406 Wis. 2d 586, ¶25).

20 No. 2020AP2007.rgb

nonprofit. The majority's conclusion refutes itself.

Apparently the majority would ask a car why it is being operated

rather than asking the driver. If the majority's analysis seems

ridiculous, that's because it is.

E. The Majority's Test

¶137 The majority affirms LIRC's denial of the exemption

under Wis. Stat. § 108.02(15)(h)2. using a two-prong test: A

nonprofit must (1) operate primarily for a religious reason and

(2) primarily engage in activities that are "religious in

nature." Majority op., ¶¶59-67. The majority's test, however,

is unmoored from the text of § 108.02(15)(h)2. The majority

insists its test is the only way to "give reasonable effect to

every word" in the statute because considering purposes alone

would "give short shrift to the word 'operated.'" Id., ¶¶44-45.

But the majority's reformulation of the text relies on an

unreasonable interpretation of § 108.02(15)(h)2., while

impermissibly adding words to the statute.

¶138 The majority offends basic rules of grammar by transmuting "operated," a transitive verb, into a noun——

"activity." It does not address what "operated" means in its

second use in Wis. Stat. § 108.02(15)(h)2.; instead, the

majority completely ignores the fact that the word is used

twice, employing a divide-and-conquer method of statutory

interpretation this court has rebuked many times. E.g., Brey,

400 Wis. 2d 417, ¶13 (citing Kalal, 271 Wis. 2d 633, ¶47); see

also Scalia & Garner, supra, at 167; King v. Burwell, 576 U.S. 473, 500-01 (2015) (Scalia, J., dissenting) ("[S]ound

21 No. 2020AP2007.rgb

interpretation requires paying attention to the whole law, not

homing in on isolated words or even isolated sections. Context

always matters.").

¶139 The majority completely reimagines the statute.

Compare the statute's actual language to the majority's remaking

of it:

 Wisconsin Stat. § 108.02(15)(h)2.: "'Employment' as

applied to work for a nonprofit

organization . . . does not include service . . . [i]n

the employ of an organization operated primarily for

religious purposes and operated, supervised,

controlled, or principally supported by a church or

convention or association of churches[.]"

 Majority's interpretation: "'Employment' as applied

to work for a nonprofit organization . . . does not

include service . . . [i]n the employ of an

organization operated that has primarily for religious

purposes and primarily performs activities that are religious in nature, which is and operated,

supervised, controlled, or principally supported by a

church or convention or association of churches[.]"

The majority's interpretation violates the "cardinal

maxim . . . that courts should not add words to a statute to

give it a certain meaning." State v. Hinkle, 2019 WI 96, ¶24,

389 Wis. 2d 1, 935 N.W.2d 271 (quoting State v. Fitzgerald, 2019

WI 69, ¶30, 387 Wis. 2d 384, 929 N.W.2d 165) (internal quotation marks omitted); State v. Neill, 2020 WI 15, ¶23, 390 Wis. 2d

22 No. 2020AP2007.rgb

248, 938 N.W.2d 521 (quoting Fond Du Lac Cnty. v. Town of

Rosendale, 149 Wis. 2d 326, 334, 440 N.W.2d 818 (Ct. App.

1989)). Instead of reading words into the statute and

rearranging the words to meet a desired result, we must

"'interpret the words the legislature actually enacted into

law.'" Neill, 390 Wis. 2d 248, ¶23 (quoting Fitzgerald, 387

Wis. 2d 384, ¶30).

¶140 Troublingly, the majority's redefinition of "operated"

to mean "activities" does not require a nonprofit to primarily

engage in activities that are "religious in nature." The

majority fails to identify the source of its "religious in

nature" requirement; it simply declares it and moves on. The

majority also fails to explain where——in the text——the majority

derives the factors it uses to deny Catholic Charities the

exemption.

¶141 With no support for its interpretation in the text of

Wis. Stat. § 108.02(15)(h)2., the majority attempts to

"buttress[] [its] conclusion" with this court's decision in Coulee Catholic Schools. Majority op., ¶50. But that decision

concerned the ministerial exception under the First Amendment,

not the statute at issue in this case. Coulee Cath. Schs. v.

LIRC, 2009 WI 88, 320 Wis. 2d 275, 768 N.W.2d 868. Because

Coulee Catholic Schools has nothing to say about the meaning of

§ 108.02(15)(h)2., the case is irrelevant. The majority baldly

asserts the decision "'provides guidance in understanding the

religious purposes exemption here[,]'" majority op., ¶52 (quoting Cath. Charities Bureau, 406 Wis. 2d 586, ¶43), but

23 No. 2020AP2007.rgb

fails to explain how Coulee Catholic Schools sheds any light on

the meaning of § 108.02(15)(h)2., a statute it never mentions.

¶142 The majority also mistakenly relies upon federal cases

interpreting 26 U.S.C. § 501(c)(3), which exempts from taxation

"[c]orporations, and any community chest, fund, or foundation,

organized and operated exclusively for religious, charitable,

scientific, testing for public safety, literary, or educational

purposes . . . ." Cases interpreting and applying this

exemption do not support the majority's conclusion that an

exemption under Wis. Stat. § 108.02(15)(h)2. is available only

if (1) a nonprofit's motivations are primarily religious and (2)

the actual activities engaged in by the nonprofit are primarily

"religious in nature." The majority relies on a case from the

Seventh Circuit, United States v. Dykema. But the majority

misunderstands Dykema and other federal cases interpreting 26

U.S.C. § 501(c)(3).

¶143 To the extent federal courts evaluate an

organization's activities, they do not delve into whether the organization's activities are "religious in nature," as the

majority does. Instead, some federal courts use activities as

evidence of motive in cases interpreting and applying 26 U.S.C.

§ 501(c)(3). Dykema is not an exception. As the court in

Dykema explained, "it is necessary and proper for the IRS to

survey all the activities of the organization, in order to

determine whether what the organization in fact does is to carry

out a religious mission or to engage in commercial business." 666 F.2d at 1100 (emphasis added).

24 No. 2020AP2007.rgb

¶144 The Seventh Circuit later verified the limited role an

organization's activities might play in the inquiry. As the

Seventh Circuit explained in Living Faith v. Commissioner, in

evaluating "whether [an organization] is 'operated exclusively'

for exempt purposes within the meaning of § 501(c)(3)" "[the

court] focus[es] on 'the purposes toward which an organization's

activity are directed, and not the nature of the activities."

950 F.2d 365, 370 (7th Cir. 1991) (quoted source omitted). The

activities and the "particular manner in which an organization's

activities are conducted" are simply "evidence" used to

"determin[e] whether an organization has a substantial nonexempt

purpose" because "an organization's purposes may be inferred

from its manner of operations." Id. at 372; accord Presbyterian

& Reformed Publ'g. Co. v. Comm'r, 743 F.2d 148, 156 (3d Cir.

1984) (stating the "inquiry must remain that of determining the

purpose to which the . . . activity is directed"); B.S.W. Grp.,

Inc. v. Comm'r, 70 T.C. 352, 356-57 (1978) (citation omitted)

("[T]he purpose towards which an organization's activities are directed, and not the nature of the activities themselves, is

ultimately dispositive of the organization's right to be

classified as a section 501(c)(3) organization exempt from tax

under section 501(a)."); Golden Rule Church Ass'n v. Comm'r, 41

T.C. 719, 728 (1964) (first citing Trinidad v. Sagrada Orden,

263 U.S. 578, 582 (1924); and then citing Unity Sch. of

Christianity, 4 B.T.A. 61, 70 (1926)) ("The statute requires, in

relevant part, that the committee be organized and operated exclusively for religious purposes. In this requirement, the

25 No. 2020AP2007.rgb

statutory language treats as a touchstone, not the

organization's activity, but rather the end for which that

activity is undertaken."). Activities serve only as "useful

indicia of the organization's purpose or purposes." Living

Faith, 950 F.2d at 372.9 Dykema's list of "[t]ypical

activities"10 in which an organization operated for religious

9 See also 26 C.F.R. § 1.501(c)(3)-1(c)(1) (stating "[a]n organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt purposes specified in section 501(c)(3). An organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt purpose"). 10 Dykema provided the following list:

(a) corporate worship services, including due administration of sacraments and observance of liturgical rituals, as well as a preaching ministry and evangelical outreach to the unchurched and missionary activity in partibus infidelium; (b) pastoral counseling and comfort to members facing grief, illness, adversity, or spiritual problems; (c) performance by the clergy of customary church ceremonies affecting the lives of individuals, such as baptism, marriage, burial, and the like; (d) a system of nurture of the young and education in the doctrine and discipline of the church, as well as (in the case of mature and well developed churches) theological seminaries for the advanced study and the training of ministers.

Dykema, 666 F.2d at 1100.

It is unclear why the majority relies on Dykema's list as heavily as it does. Dykema did not cite any legal authority supporting its list of typical religious activities. See id. The court simply made it up. Moreover, Dykema's list is not used by other courts. The only published opinions having relied on its list are the court of appeals, below, and this court——in this very case. Moreover, Dykema's list was meant to serve only as a list of "[t]ypical activities" done for a religious purpose. Id. Nothing in Dykema suggests a nonprofit is 26 No. 2020AP2007.rgb

purposes might engage is just that——a list of typical religious

activities. 666 F.2d at 1100. Courts interpreting and applying

26 U.S.C. § 501(c)(3) have acknowledged that religious purposes

might be unorthodox or resemble secular purposes. E.g., Golden

Rule Church Ass'n, 41 T.C. 719 (holding a commercial enterprise

was operated for religious purposes because it was created as an

illustration of the applicability of a church's teachings in

daily life); accord Dep't of Emp. v. Champion Bake-N-Serve,

Inc., 592 P.2d 1370 (Idaho 1979) (holding a bakery was "operated

primarily for religious purposes" under state law because the

students at issue worked at the bakery as a part of their

religious training); see Amos, 483 U.S. at 344 (Brennan, J.,

concurring in the judgment) (noting "[c]hurches often regard the

provision of [community services] as a means of fulfilling

religious duty and of providing an example of the way of life a

church seeks to foster").

¶145 Federal cases interpreting 26 U.S.C. § 501(c)(3) do

not support the majority's bifurcated purpose-activities test, under which courts must determine whether an activity is

religious or secular in nature. At most, the federal cases

support examining an organization's activities as evidence of

"operated primarily for religious purposes" only if the organization engages primarily in activities that are "religious in nature," as the majority requires.

The majority also wrongly asserts that the Dykema court "examined an organization's actual activities." Majority op., ¶87. The Dykema court did no such thing. The court reversed a district court decision denying the enforcement of an IRS summons that called for 14 categories of records belonging to a church. 666 F.2d at 1098, 1104.

27 No. 2020AP2007.rgb

motive. Because both LIRC and the majority concede that the

reason Catholic Charities are operated is religious, federal

precedent supplies no support for the majority's faulty

conclusion.

¶146 It is unsurprising that no other court has adopted the

majority's approach; it is incoherent. The majority's

bifurcated purpose-activities test falls apart upon the faintest

scrutiny. Most obviously, religious activities cannot be

separated from religious purposes. It is the underlying

religious motivation that makes an activity religious. See,

e.g., Thomas v. Rev. Bd. of Ind. Emp. Sec. Div., 450 U.S. 707,

715-16 (1981); Univ. of Great Falls v. N.L.R.B., 278 F.3d 1335,

1346 (D.C. Cir. 2002). For example, anyone——religious or

irreligious——could use peyote,11 kill animals,12 grow a 1/2–inch

beard,13 or use Saturday as a day of rest.14 One could read the

Bible for secular or religious reasons. Cf. Locke v. Davey, 540

U.S. 712, 734-35 (2004) (Thomas, J., dissenting) (explaining

that "the study of theology does not necessarily implicate religious devotion or faith" since it may be done "from a

secular perspective as well as from a religious one"). One

Emp. Div., Dep't of Hum. Res. of Or. v. Smith, 494 U.S. 11

872 (1990).

Church of Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 12

U.S. 520 (1993).

Holt v. Hobbs, 574 U.S. 352 (2015) (holding a prison's 13

refusal to allow a Muslim to grow a 1/2-inch beard violated the Religious Land Use and Institutionalized Persons Act of 2000). 14 Sherbert v. Verner, 374 U.S. 398 (1963).

28 No. 2020AP2007.rgb

could erect a cross to promote a Christian message or honor

fallen soldiers. See Am. Legion v. Am. Humanist Ass'n, 588 U.S.

___, 139 S. Ct. 2067, 2082 (2019). Such activities are

religious activities only if motivated by religious beliefs.

See Holt v. Hobbs, 574 U.S. 352, 360-61 (2015); Burwell v. Hobby

Lobby Stores, Inc., 573 U.S. 682, 717 n.28 (2014); Wisconsin v.

Yoder, 406 U.S. 205, 216 (1972) ("A way of life, however

virtuous and admirable, may not be interposed as a barrier to

reasonable state regulation of education if it is based on

purely secular considerations; to have the protection of the

Religion Clauses, the claims must be rooted in religious

belief."). Unable to divorce religious activities from

religious motivations, the majority's activities prong swallows

the majority's purposes prong. The only activities that are

"religious in nature," according to the majority, are activities

that presuppose a religious purpose——e.g., proselytizing and

teaching one's religious doctrine. Majority op., ¶¶55, 60. The

majority's purposes prong is superfluous. ¶147 The majority's activities prong doesn't simply ask

whether an activity is religious, it asks whether it is

"religious in nature." But no activities are inherently

religious; religious motivation makes an activity religious.

The majority actually inquires whether Catholic Charities'

activities are stereotypically religious. Nothing in the text

of Wis. Stat. § 108.02(15)(h)2., however, prompts the court to

determine what religious activities are sufficiently stereotypical. The majority never explains what an inherently

29 No. 2020AP2007.rgb

religious activity is, leaving it up to courts to make

determinations of religiosity on an ad hoc basis. What is

inherently religious will simply reflect what an individual

judge subjectively regards as religious enough. The statute

does not demand this exercise, and more importantly the

constitution bars such an inquiry. Infra, ¶¶163-97.

¶148 Further highlighting the deficiencies of the

majority's test, the majority fails to explain why the factors

it furnishes make an activity more or less "religious in

nature." For example, why does offering a service to those of a

different faith tradition make the activity less "religious in

nature"? See majority op., ¶61. Doesn't this factor conflict

with the majority's statements that religious outreach and

evangelism are "religious in nature"? Id., ¶60. The majority

asserts that activities resembling secular ones are less

"religious in nature." Id., ¶¶63-64, 66. But the overlap

between secular and religious conduct does not make the

religious conduct any less religious. As the Court of Appeals for the District of Columbia Circuit explained, "[t]hat a

secular university might share some goals and practices with a

Catholic or other religious institution cannot render the

actions of the latter any less religious." Univ. of Great

Falls, 278 F.3d at 1346.

¶149 Incoherency aside, the majority's primarily-religious-

in-nature-activities requirement is highly susceptible to

manipulation. "[T]he definition of a particular program can always be manipulated" such that the inquiry may be "'reduced to

30 No. 2020AP2007.rgb

a simple semantic exercise.'" See Agency for Int'l Dev. v. All.

for Open Soc'y Int'l, Inc., 570 U.S. 205, 215 (2013) (quoting

Legal Servs. Corp. v. Velazquez, 531 U.S. 533, 547 (2001)). The

activities of Catholic Charities can be characterized as the

provision of charitable social services. They can also be

characterized as "providing services to the poor and

disadvantaged as an expression of the social ministry of the

Catholic Church in the Diocese of Superior" and acting as "an

effective sign of the charity of Christ." A religious activity

can be described narrowly, making it sound more secular, or

described broadly, making it sound more religious. Baking

sounds secular while religious training sounds religious; both

characterizations could fit the activities at issue in a case.

See Champion Bake-N-Serve, Inc., 592 P.2d 1370. Whether one is

entitled to the exemption under Wis. Stat. § 108.02(15)(h)2.

cannot turn on word games.

¶150 The court makes meager effort to explain why it

considers activities like proselytizing and teaching religious doctrine more religious than religiously motivated charitable

services. Many religions consider charity a central religious

practice. As one amicus——the Jewish Coalition for Religious

Liberty ("the Jewish Coalition")——explains, it believes each of

the commandments in the Torah is a divine obligation.15 One of

the obligations is charity, which the Jewish Coalition explains

15 Amicus Br. Jewish Coalition for Religious Liberty, at 7.

31 No. 2020AP2007.rgb

is sometimes connected to religious rituals and sometimes not;

regardless, both equally express the Jewish commandments.16

¶151 The majority's conclusion that Catholic Charities'

activities are not religious because their activities are

charitable is unsupportable. In this case, there is no daylight

between religious activities and charitable activities. See St.

Augustine's Ctr. for Am. Indians, Inc. v. Dep't of Lab., 449

N.E.2d 246, 249 (Ill. Ct. App. 1983) (quoting St. Vincent DePaul

Shop v. Garnes, No. 74AP-76, 1974 WL 184313, *3 (Ohio Ct. App.

Sept. 17, 1974) (unpublished opinion)) (alterations in original)

("[T]he terms 'charitable' and 'religious' are not mutually

exclusive and . . . 'the fact that an organization is charitable

does not preclude it from being religious.'"). In their briefs,

Catholic Charities explain that charity is a religious activity

for Catholics, in which Catholic Charities engages as the

Diocese of Superior's social ministry arm. According to

Catholic Charities, "[c]harity is 'the greatest' of the Catholic

Church's theological virtues . . . . Charity . . . is a 'constitutive element of the Church's mission and an

indispensable expression of her very being.'" Consistent with

Catholic doctrine——as documented in the briefs——"[t]he Catholic

Church 'claims works of charity as its own inalienable duty and

right.'" Catholic Charities explains that according to the

Catholic faith, charity is a religious duty they must fulfill in

an impartial manner, without proselytizing. As Catholic

Charities inform us, "'the Church's missionary spirit is not

16 Id. at 7-8.

32 No. 2020AP2007.rgb

about proselytizing, but the testimony of a life that

illuminates the path, which brings hope and love.'" Catholic

Charities "carr[y] on [the Diocese of Superior's] good work by

providing programs and services that are based on gospel values

and principles of the Catholic Social Teachings." The purpose

of Catholic Charities "is to be an effective sign of the charity

of Christ[.]" Multiple amici similarly confirm that charity is

a religious activity in each of their respective faith

traditions. As one court observed, "the concept of acts of

charity as an essential part of religious worship is a central

tenet of all major religions." W. Presbyterian Church v. Bd. of

Zoning Adjustment of D.C., 862 F. Supp. 538, 544 (D.D.C. 1994).

For example, one of the five Pillars of Islam——the fundamental ritual requirements of worship, including ritual prayer——requires Muslims of sufficient means to give alms to the poor and other classes of recipients. Also, Hindus belonging to the Brahmin, Ksatriya, and Vaisya castes are required to fulfill five daily obligations of worship, one of which is making offerings to guests, symbolized by giving food to a priest or giving food or aid to the poor. The concept finds its place in Judaism in the form of tendering to the poor clothing for the naked, food for the hungry, and benevolence to the needy. Id. (internal citations omitted). Reflecting this

understanding, an Illinois court17 recently reversed a state

agency determination that an organization was not primarily

operated for religious purposes, holding the agency "erred by

recharacterizing [the provision of meals, homework help, and

Illinois courts consider the activities of a nonprofit in 17

cases under the Illinois equivalent of Wis. Stat. § 108.02(15)(h)2. E.g., Concordia Ass'n v. Ward, 532 N.E.2d 411 (Ill. Ct. App. 1988).

33 No. 2020AP2007.rgb

literacy improvement] as secular activities" when the

organization "characterized [those activities] as religious

exercises" of the organization. By The Hand Club for Kids, NFP,

Inc. v. Dep't of Emp. Sec., 188 N.E.3d 1196, ¶52 (Ill. Ct. App.

2020). The same is true in this case. Catholic Charities'

charitable activities are a part of their religious exercise,

which means those activities are religious. This court

belittles Catholic Charities' faith——and many other faith

traditions——by mischaracterizing their religiously motivated

charitable activities as "secular in nature," majority op., ¶67—

—that is, not really religious at all.

¶152 Ultimately, the majority demolishes its own test,

obliquely saying the activities the majority will consider

inherently religious "may be different for different faiths."

Id., ¶55. If what constitutes an inherently religious activity

might be different for different faiths, the majority must

explain why religiously motivated charity is not an inherently

religious activity for Catholics. It never does. ¶153 The majority's erroneous interpretation and

application of Wis. Stat. § 108.02(15)(h)2.——which produces the

demeaning conclusion that the social ministry arm of the Diocese

of Superior is inherently secular——would be baffling but for the

majority's admissions of its results-oriented approach.

According to the majority, a plain reading of the statute would

be "'too broad'" a policy, so the majority adopts a contorted

construction instead. Id., ¶48 (quoting Cath. Charities Bureau, 406 Wis. 2d 586, ¶37). The majority anxiously speculates a

34 No. 2020AP2007.rgb

plain reading might exempt Catholic colleges, schools, and

(gasp) hospitals. Id., ¶48 n.12.18 This court has neither the

authority nor competency to decide how broad or narrow a policy

should be. The legislature decided how broadly the exemption

sweeps, and it is not for this court to second-guess that policy

decision. Friends of Frame Park, U.A. v. City of Waukesha, 2022

WI 57, ¶96, 403 Wis. 2d 1, 976 N.W.2d 263 (Rebecca Grassl

Bradley, J., concurring) ("The people of Wisconsin elect judges

The majority's footnote expressing indignation at the 18

prospect that religious colleges, schools, and hospitals might be exempt under Catholic Charities' reading of the exemption appears to prejudge issues not before this court. Amicus curiae, Maranatha Baptist University, et al., comprises a collection of faith-based nonprofits that primarily provide education. Its brief notes that a number of its members currently qualify for the exemption under Wis. Stat. § 108.02(15)(h)2., but would likely lose that exemption if this court upholds the court of appeals. Amicus Br. Maranatha Baptist University, et al., at 5-6. Amicus argues "[t]he federal government has long counted religious schools as being operated primarily for religious purposes." Id. at 9 n.1 (citing Unemployment Insurance Program Letter No. 28-87, U.S. Dept. of Labor (June 10, 1987)) ("'The second category of services exempt from the required coverage are those performed in the employ of religious schools and other entities . . . .'"). The majority simply ignores this argument.

Curiously, the majority's assumption that Catholic colleges and schools cannot qualify for the exemption exists in tension with the cases upon which it relies. The majority analogizes its test to cases applying the ministerial exception under the First Amendment. In each of the cases the majority cites, however, the religious school received the exception. Our Lady of Guadalupe Sch. v. Morrissey-Berru, 591 U.S. ___, 140 S. Ct. 2049 (2020); Coulee Cath. Schs. v. LIRC, 2009 WI 88, 320 Wis. 2d 275, 768 N.W.2d 868; see also Hosanna-Tabor Evangelical Lutheran Church & Sch. v. E.E.O.C., 565 U.S. 171 (2012). The majority neglects to explain why Catholic colleges and schools receive such radically different treatment under the test it employs in this case.

35 No. 2020AP2007.rgb

to interpret the law, not make it."); See also Scalia & Garner,

supra, at 21; Antonin Scalia, A Matter of Interpretation:

Federal Courts and the Law 20 (1997) ("Congress can enact

foolish statutes as well as wise ones, and it is not for courts

to decide which is which and rewrite the former."). "Courts

decide what the law is, not what it should be. In the course of

executing this judicial function, we neither endorse nor condemn

the legislature's policy choices." See Sanders, 408 Wis. 2d

370, ¶44. Judges have no authority to advance their favored

policies by expanding or narrowing a statute's text beyond what

the fair meaning of the statute contemplates.

¶154 To mask its policy-driven reasoning, the majority

employs the shibboleth that remedial statutes are liberally

construed and exemptions are narrowly construed——a long-

discredited maxim that pawns judicial activism off as

legitimate, textual interpretation. See CTS Corp. v.

Waldburger, 573 U.S. 1, 12 (2014) (stating the remedial statute

canon is not "a substitute for a conclusion grounded in the statute's text and structure"). The majority's unabashed

reliance on the remedial statute canon is troubling given the

immense criticism the so-called canon has received. The

majority makes clear it is aware of these criticisms, but uses

the maxim anyway, without defending it. Majority op., ¶47 n.11.

The majority should not employ the maxim so thoughtlessly, since

it has been severely criticized and abandoned by many jurists

espousing a wide range of judicial philosophies. E.g., Regions Bank v. Legal Outsource PA, 936 F.3d 1184, 1195 (11th Cir. 2019)

36 No. 2020AP2007.rgb

(expressly refusing to apply the so-called remedial statute

canon because of its "dubious value"); Dir., Off. of Workers'

Comp. Programs, Dep't of Lab. v. Newport News Shipbuilding & Dry

Dock Co., 514 U.S. 122, 135 (1995) (calling the maxim the "last

redoubt of losing causes"); Keen v. Helson, 930 F.3d 799, 805

(6th Cir. 2019) (describing the maxim as the least useful of the

interpretive tools a judge might use); see also E. Bay Mun.

Util. Dist. v. U.S. Dep't of Com., 142 F.3d 479, 484 (D.C. Cir.

1998) ("express[ing] . . . general doubts about the canon").

Antonin Scalia once compared the canon's use to Chinese water

torture, in which "one's intelligence [is] strapped down

helplessly" as the maxim is repeated as a "ritual error[]."

Antonin Scalia, Assorted Canards of Contemporary Legal Analysis,

40 Case W. Rsrv. L. Rev. 581, 581 (1989) [hereinafter Assorted

Canards].

¶155 Judges have discarded the remedial statute canon

because it has three critical flaws. The first is the canon's

"indeterminate coverage." Regions Bank, 936 F.3d at 1195. Jurists have been unable to agree on what constitutes a remedial

statute. Scalia, Assorted Canards, supra, at 583-86; Ober

United Travel Agency, Inc. v. U.S. Dep't of Lab., 135 F.3d 822,

825 (D.C. Cir. 1998) ("Although courts have often used the

maxim[,] . . . it is not at all apparent just what is and what

is not remedial legislation."). This is unsurprising,

considering "almost every statute might be described as remedial

in the sense that all statutes are designed to remedy some problem." CTS Corp., 573 U.S. at 12; accord Scalia & Garner,

37 No. 2020AP2007.rgb

supra, at 364 ("Is any statute not remedial? Does any statute

not seek to remedy an unjust or inconvenient situation?"); Keen,

930 F. 3d at 805 (noting that the canon's "trigger——a 'remedial

statute'——is hopelessly vague").

¶156 Second, what constitutes a "liberal" or "strict"

construction is unanswerable. Scalia & Garner, supra, at 365.

As Antonin Scalia noted, the canon "lay[s] a judicial thumb" "of

indeterminate weight" "on one or the other side of the scales"

in statutory interpretation. Scalia, Assorted Canards, supra,

at 582. "How 'liberal' is liberal, and how 'strict' is strict?"

Id. No one can say.

¶157 Finally, the maxim is "premised on two mistaken ideas:

(1) that statutes have a singular purpose and (2) that [the

legislature] wants statutes to extend as far as possible in

service of that purpose. Instead, statutes have many competing

purposes, and [the legislature] balances these competing

purposes by negotiating and crafting statutory text." Keen, 930

F.3d at 805 (citing Newport News, 514 U.S. at 135-36); CTS Corp., 573 U.S. at 12 (quoting Rodriguez v. United States, 480

U.S. 522, 525–26 (1987) (per curiam)) ("[T]he Court has

emphasized that 'no legislation pursues its purposes at all

costs.'"); Encino Motorcars, LLC v. Navarro, 584 U.S. ___, 138

S. Ct. 1134, 1142 (2018) (citations omitted). As Richard Posner

explained, the maxim is "unrealistic about legislative

objectives" and "ignore[s] the role of compromise in the

legislative process and, more fundamentally, the role of interest groups, whose clashes blunt the thrust of many

38 No. 2020AP2007.rgb

legislative initiatives." Richard A. Posner, Statutory

Interpretation——in the Classroom and in the Courtroom, 50 U.

Chi. L. Rev. 800, 808-09 (1983). The maxim ignores that

"limiting provisions . . . are no less a reflection of the

genuine 'purpose' of the statute than the operative provisions,

and it is not the court's function to alter the legislative

compromise." Scalia & Garner, supra, at 21. Those who employ

the maxim rarely appreciate that "[t]oo much 'liberality' will

undermine the statute as surely as too literal an interpretation

would." In re Erickson, 815 F.2d 1090, 1094 (7th Cir. 1987).

¶158 In fact, the remedial statute "canon" is not a canon

at all. It is "an excuse" to reach a desired result. Keen, 930

F.3d at 805; Scalia, Assorted Canards, supra, at 586 (stating

the maxim "is so wonderfully indeterminate" it can always be

used to "reach[] the result the court wishes to achieve"). Its

vagueness makes it "an open invitation" to ignore the statute's

text and "engage in judicial improvisation" to reach the judge's

preferred outcome. Scalia & Garner, supra, at 365-66. This court should abandon the maxim and return to deciding cases

based upon the fair meaning of the text. Instead of reading the

exemption strictly, "the court need only determine 'how a

reasonable reader, fully competent in the language, would have

understood the text at the time it was issued.'" United Am.,

LLC v. DOT, 2021 WI 44, ¶44, 397 Wis. 2d 42, 959 N.W.2d 317

(Rebecca Grassl Bradley, J., dissenting) (quoting Scalia &

Garner, supra, at 33). The majority violates the rule that a "strict construction" cannot be "an unreasonable construction."

39 No. 2020AP2007.rgb

Sw. Airlines Co. v. DOR, 2021 WI 54, ¶25, 397 Wis. 2d 431, 960

N.W.2d 384 (citing Covenant Healthcare Sys., Inc. v. City of

Wauwatosa, 2011 WI 80, ¶32, 336 Wis. 2d 522, 800 N.W.2d 906);

see also McNeil v. Hansen, 2007 WI 56, ¶10, 300 Wis. 2d 358, 731

N.W.2d 273 (quoting 82 C.J.S. Statutes § 371 (2006)) (stating

exemptions to remedial statutes "'should be strictly, and

reasonably, construed and extend only as far as their language

fairly warrants'"). To the extent the maxim delivers any value,

it is not even applicable in this case because the statute is

unambiguous. State of Wis. Dep't of Just. v. DWD, 2015 WI 114,

¶32, 365 Wis. 2d 694, 875 N.W.2d 545 (quoting Salazar v. Ramah

Navajo Chapter, 567 U.S. 182, 207 (2012) (Roberts, J.,

dissenting)).

¶159 The majority compounds its errors by using legislative

history to contradict (rather than confirm) the plain meaning of

Wis. Stat. § 108.02(15)(h)2. Kalal, 271 Wis. 2d 633, ¶51; State

v. Martin, 162 Wis. 2d 883, 897 n.5, 470 N.W.2d 900 (1991).

Legislative history is not the law, and it cannot override the law's clear meaning. See State v. Grandberry, 2018 WI 29, ¶55,

380 Wis. 2d 541, 910 N.W.2d 214 (Kelly, J., concurring) ("[W]e

give effect only to what the legislature does, not what it tried

to do."). In this case, the majority does not even cite state

legislative history; instead, it relies upon federal legislative

history to contravene the plain meaning of a state law. In so

doing, the majority makes another "law's history superior to the

law itself[.]" Clean Wis., Inc. v. DNR, 2021 WI 71, ¶91, 398 Wis. 2d 386, 961 N.W.2d 346 (Rebecca Grassl Bradley, J.,

40 No. 2020AP2007.rgb

dissenting). Using long-discredited methodologies, the

majority's interpretation discards the statutory text, ignores

its plain meaning, and triggers constitutional quandaries.

III. THE MAJORITY'S INTERPRETATION VIOLATES THE FIRST AMENDMENT AND THE WISCONSIN CONSTITUTION ¶160 The majority's decision is an egregious example of

legislating from the bench. It takes a simple statute and

twists its language to narrow its sweep. In so doing, the

majority engages in religious discrimination and entangles the

state with religion in violation of the First Amendment.19

Courts sometimes——though inappropriately——warp a statute's fair

meaning to save it from unconstitutionality. See St. Augustine

Sch. v. Taylor, 2021 WI 70, ¶112, 398 Wis. 2d 92, 961 N.W.2d 635

(Rebecca Grassl Bradley, J., dissenting) (discussing a

particularly egregious example). In this case, the majority

bends over backwards to alter the statute's meaning and create a

constitutional violation, turning the canon of constitutional

avoidance on its head. State v. Stenklyft, 2005 WI 71, ¶8, 281

Wis. 2d 484, 697 N.W.2d 769 (quoting Panzer v. Doyle, 2004 WI

52, ¶65, 271 Wis. 2d 295, 680 N.W.2d 666); Jankowski v.

Milwaukee Cnty., 104 Wis. 2d 431, 439, 312 N.W.2d 45 (1981)

(quoting Niagara of Wis. Paper Corp. v. DNR, 84 Wis. 2d 32, 50,

Any constitutional issues arising from a plain-meaning 19

interpretation of Wis. Stat. § 108.02(15)(h)2. are not before the court. Similarly, the constitutionality of the second prong of § 108.02(15)(h)2., requiring the nonprofit to be "operated, supervised, controlled, or principally supported by a church or convention or association of churches[,]" is not before the court. See, e.g., Christian Sch. Ass'n of Greater Harrisburg v. Commonwealth, Dep't of Lab. & Indus., 423 A.2d 1340, 1346-47 (Pa. 1980).

41 No. 2020AP2007.rgb

268 N.W.2d 153 (1978)); Baird v. La Follette, 72 Wis. 2d 1, 5,

239 N.W.2d 536 (1976) ("Where there is serious doubt of

constitutionality, we must look to see whether there is a

construction of the statute which is reasonably possible which

will avoid the constitutional question.").

¶161 The First Amendment declares: "Congress shall make no

law respecting an establishment of religion, or prohibiting the

free exercise thereof . . . ." U.S. Const. amend. I. The

Religion Clauses of the First Amendment apply to the states via

the Fourteenth Amendment. Everson v. Bd. of Educ. of Ewing

Twp., 330 U.S. 1, 15 (1947); Cantwell v. Connecticut, 310 U.S.

296, 303 (1940).20 Catholic Charities claim an inquiry into

Justice Clarence Thomas of the United States Supreme 20

Court has questioned whether the Establishment Clause properly applies to states. Zelman v. Simmons-Harris, 536 U.S. 639, 678- 79 (2002) (Thomas, J., concurring); Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 45, 49-51 (2004) (Thomas, J., concurring in the judgment); Van Orden v. Perry, 545 U.S. 677, 692-93 (2005) (Thomas, J., concurring); Town of Greece v. Galloway, 572 U.S. 565, 604-07 (2014) (Thomas, J., concurring in part and concurring in the judgment); Am. Legion v. Am. Humanist Ass'n, 588 U.S. ___, 139 S. Ct. 2067, 2095 (2019) (Thomas, J., concurring in the judgment); Espinoza v. Mont. Dep't of Revenue, 591 U.S. ___, 140 S. Ct. 2246, 2263-64 (2020) (Thomas, J., concurring). Justice Thomas has argued the Establishment Clause is a "federalism provision," Newdow, 542 U.S. at 45 (Thomas, J., concurring in the judgment), which merely prohibits Congress "from establishing a national religion" and "interfer[ing] with state establishments." Id. at 50. It does "not protect any individual right." Id. Under this theory, the Establishment Clause, "resists incorporation." Id. at 45. "[A]n incorporated Establishment Clause would prohibit exactly what the text of the Clause seeks to protect: state establishments of religion." Am. Legion, 139 S. Ct. at 2095 (Thomas, J., concurring in the judgment) (citation omitted). Scholars have debated whether the Establishment Clause was meant to be incorporated through the Fourteenth Amendment. Compare Vincent Philip Muñoz, The Original Meaning of the Establishment Clause and the 42 No. 2020AP2007.rgb

whether their activities are "religious in nature" violates the

First Amendment by discriminating against their religious

practices and excessively entangling the government in religious

affairs.

¶162 The majority improperly stacks the deck against

Catholic Charities' claims under the Religion Clauses from the

outset, requiring Catholic Charities to prove their First

Amendment rights are violated "beyond a reasonable doubt."

Majority op., ¶77. "The United States Supreme Court has

abandoned the beyond-a-reasonable-doubt standard for assessing

the constitutionality of statutory law[,]" and this court must

follow the Court's pronouncements on issues of federal law.

Winnebago Cnty. v. C.S., 2020 WI 33, ¶65, 391 Wis. 2d 35, 940

N.W.2d 875 (Rebecca Grassl Bradley, J., dissenting) (citing

Edward C. Dawson, Adjusting the Presumption of Constitutionality

Based on Margin of Statutory Passage, 16 U. Pa. J. Const. L. 97,

109 (2013)). "No United States Supreme Court case since 1984

Impossibility of Its Incorporation, 8 J. Const. L. 585 (2006), and William K. Lietzau, Rediscovering the Establishment Clause: Federalism and the Rollback of Incorporation, 39 DePaul L. Rev. 1191 (1990), with Kurt T. Lash, The Second Adoption of the Establishment Clause: The Rise of the Nonestablishment Principle, 27 Ariz. State L.J. 1085 (1995), and Nathan S. Chapman & Michael W. McConnell, Agreeing to Disagree: How the Establishment Clause Protects Religious Diversity and Freedom of Conscience 75-84 (2023). Regardless, the Court has held the Establishment Clause applies to the states, and we are duty bound to apply the Court's decisions interpreting and applying the Establishment Clause. State v. Jennings, 2002 WI 44, ¶¶18- 19, 252 Wis. 2d 228, 647 N.W.2d 142; cf. Hutto v. Davis, 454 U.S. 370, 374 (1982) (per curiam) ("[U]nless we wish anarchy to prevail within the federal judicial system, a precedent of this Court must be followed by the lower federal courts no matter how misguided the judges of those courts may think it to be.").

43 No. 2020AP2007.rgb

has applied a strong presumption of constitutionality in

challenges to federal statutes." Mayo v. Wis. Injured Patients

& Fams. Comp. Fund, 2018 WI 78, ¶78, 383 Wis. 2d 1, 914 N.W.2d

678 (Rebecca Grassl Bradley, J., concurring) (citing Dawson,

supra, at 109 n.43). Instead, the Court "will strike down

statutes upon a 'plain showing' of their unconstitutionality, or

when their unconstitutionality is 'clearly demonstrated.'" Id.,

¶80. "This court continues to reflexively apply the rule

without any acknowledgement of the United States Supreme Court's

reformulation of the standard." Id. (citations omitted).

Conforming to the standards articulated by the Court would end

the absurdity of applying the beyond-a-reasonable-doubt

standard. The majority does not hold Catholic Charities' First

Amendment rights are not violated by its interpretation of Wis.

Stat. § 108.02(15)(h)2.; instead, it merely holds Catholic

Charities failed to prove their rights are violated "beyond a

reasonable doubt." See C.S., 391 Wis. 2d 35, ¶67 (Rebecca

Grassl Bradley, J., dissenting). A. Religious Discrimination

¶163 The majority's interpretation of Wis. Stat.

§ 108.02(15)(h)2. violates the First Amendment's Free Exercise

Clause and Establishment Clause by discriminating among

religious faiths. The majority sidesteps the issue of religious

discrimination by declaring Catholic Charities failed to show

the law burdens their free exercise of religion. Majority op.,

¶¶105-07. The majority, however, misapprehends Catholic Charities' alleged burden, causing it to erroneously conclude

44 No. 2020AP2007.rgb

there is no burden on their free exercise at all. Contrary to

the majority's assertions, Catholic Charities do not allege that

paying the tax itself burdens their free exercise of religion.

See Id.21 Catholic Charities never argued the Free Exercise

Clause guarantees them an exemption from paying the unemployment

tax. Instead, Catholic Charities assert that discriminatorily

denying them the exemption under § 108.02(15)(h)2. burdens their

free exercise of religion.

¶164 Catholic Charities are correct.22 The United States

Supreme Court has long held that withholding a benefit or

privilege based on religious status or activity may constitute a

burden on the free exercise of religion. Sherbert v. Verner,

374 U.S. 398, 404 (1963); Trinity Lutheran Church of Columbia,

Inc. v. Comer, 582 U.S. 449, 466 (2017) (holding expressly

requiring a religious institution to renounce its religious

character in order to receive a public benefit imposes a penalty

The majority exclusively relies upon cases in which the 21

litigant argued the Free Exercise Clause required the state to provide an exemption from a generally applicable tax. Majority op., ¶105 (first citing Jimmy Swaggart Ministries v. Bd. of Equalization of Cal., 493 U.S. 378, 391 (1990); and then citing Hernandez v. Comm'r, 490 U.S. 680, 699-700 (1989)); see also United States v. Lee, 455 U.S. 252 (1982) (rejecting that the Free Exercise Clause requires an exemption from paying social security taxes even if the payment of such taxes violates one's sincerely held religious beliefs).

The Free Exercise Clause would not, absent Wis. Stat. § 22

108.02(15)(h)2., require the state to exempt Catholic Charities from paying the tax. After it creates a religious exemption, however, the state cannot discriminate against certain religions or religious practices in applying the exemption. See Carson v. Makin, 596 U.S. 767, 785 (2022); Golden Rule Church Ass'n v. Comm'r, 41 T.C. 719, 729 (1964).

45 No. 2020AP2007.rgb

on the free exercise of religion); Espinoza v. Mont. Dep't of

Revenue, 591 U.S. ___, 140 S. Ct. 2246, 2260 (2020) (quoted

source omitted) (noting "precedents have 'repeatedly confirmed'

the straightforward rule that . . . [w]hen otherwise eligible

recipients are disqualified from a public benefit 'solely

because of their religious character,' we must apply strict

scrutiny"); Carson v. Makin, 596 U.S. 767, 786-88 (2022)

(holding religious status or activity cannot be the basis for

denying a benefit or privilege); Lyng v. Nw. Indian Cemetery

Protective Ass'n, 485 U.S. 439, 449 (1988). As the Supreme

Court said long ago, "[i]t is too late in the day to doubt that

the liberties of religion and expression may be infringed by the

denial of or placing of conditions upon a benefit or privilege."

Sherbert, 374 U.S. at 404 (citations omitted).

¶165 Supreme Court precedent has focused on the denial of a

"generally available" benefit to those with a religious status

or who engage in certain religious activities. Carson, 596 U.S.

at 780. For example, in Sherbert, an employer fired a member of the Seventh-day Adventist Church because she would not work on

Saturdays, and the state later denied her otherwise generally

available unemployment benefits because it determined her

religious beliefs were not "good cause" to reject other

employment. 374 U.S. at 400. The Supreme Court held that

denying her unemployment benefits because of her religious

practices placed a burden on her free exercise of religion:

Here not only is it apparent that appellant's declared ineligibility for benefits derives solely from the practice of her religion, but the pressure upon her to forego that practice is unmistakable. The ruling 46 No. 2020AP2007.rgb

forces her to choose between following the precepts of her religion and forfeiting benefits, on the one hand, and abandoning one of the precepts of her religion in order to accept work, on the other hand. Governmental imposition of such a choice puts the same kind of burden upon the free exercise of religion as would a fine imposed against appellant for her Saturday worship. Id. at 404. As the court concluded, "to condition the

availability of benefits upon this appellant's willingness to

violate a cardinal principle of her religious faith effectively

penalizes the free exercise of her constitutional liberties." Id. at 406.23

¶166 In Trinity Lutheran, a state offered grants to

nonprofits to help finance the purchase of rubber playground

surfaces. 582 U.S. at 454. The program awarded grants based on

several religiously neutral criteria, such as the level of

poverty in the surrounding area and the applicant's plan to

promote recycling. Id. at 455. However, the state denied

Trinity Lutheran Church Child Learning Center a grant it was

otherwise qualified to receive because of the state's policy to

deny grants to any applicant owned or controlled by a church,

sect, or religious entity. Id. at 455-56. The Court held that

denying Trinity Lutheran the otherwise available grant burdened

See also Thomas v. Rev. Bd. of Ind. Emp. Sec. Div., 450 23

U.S. 707 (1981) (holding that failure to provide a Jehovah's Witness unemployment benefits because he quit his job due to his religious objections to making armaments burdened his free exercise); Hobbie v. Unemployment Appeals Comm'n of Fla., 480 U.S. 136 (1987) (holding that failure to provide a member of the Seventh-day Adventist Church unemployment benefits because she was fired after refusing to work from sundown on Friday to sundown on Saturday in accordance with her religious beliefs burdened her free exercise of religion).

47 No. 2020AP2007.rgb

Trinity Lutheran's free exercise of religion. The Court

reasoned a denial based on religion penalizes religious

exercise:

[T]he Department's policy puts Trinity Lutheran to a choice: It may participate in an otherwise available benefit program or remain a religious institution. Of course, Trinity Lutheran is free to continue operating as a church . . . . But that freedom comes at the cost of automatic and absolute exclusion from the benefits of a public program for which the Center is otherwise fully qualified. And when the State conditions a benefit in this way, . . . the State has punished the free exercise of religion: "To condition the availability of benefits . . . upon [a recipient's] willingness to . . . surrender[] his religiously impelled [status] effectively penalizes the free exercise of his constitutional liberties." Id. at 462 (some alterations in original) (quoting McDaniel v.

Paty, 435 U.S. 618, 626 (1978) (plurality opinion)). The Court

acknowledged the state's policy did not constitute direct

coercion over religious exercise. Id. at 463. But withholding

an otherwise available benefit based on religious status creates

constitutionally intolerable indirect coercion over, and a

penalty on, religious exercise. Id. (quoting Lyng, 485 U.S. at

450) ("[T]he Free Exercise Clause protects against 'indirect coercion or penalties on the free exercise of religion, not just

outright prohibitions.'").

¶167 In Carson, a state provided tuition assistance to

parents who lived in school districts that were unable to

operate a secondary school. 596 U.S. at 773. Under the

program, parents chose the school they wanted their child to

attend and the state school administrative units paid the school. Id. at 773-74. In order for a private school to

48 No. 2020AP2007.rgb

receive the payment, the school needed to meet basic

requirements under the state compulsory education law, like

offering a course on the history of the state. Id. at 774.

State law excluded "sectarian" schools from the tuition

reimbursement program. Id. The petitioners wished to send

their children to schools that were, but for the "nonsectarian"

requirement, eligible to receive the tuition assistance. Id. at

776.

¶168 The Court held the program's "nonsectarian"

requirement violated the Free Exercise Clause because the law

"'effectively penalize[d] the free exercise' of religion" by

conditioning the tuition assistance on the school's religious

character. Id. at 780. The state argued that lesser scrutiny

should apply because it was not discriminating against religious

status, but withheld state funds if the school engaged in

certain religious activities. Id. at 786-87. The Court

rejected the status-activities distinction, noting that "[a]ny

attempt to give effect to such a distinction by scrutinizing whether and how a religious school pursues its educational

mission would . . . raise serious concerns about state

entanglement with religion and denominational favoritism." Id.

at 787 (citations omitted).

¶169 The exemption in this case is available only to

religiously affiliated institutions. See Wis. Stat.

§ 108.02(15)(h)2. (requiring the nonprofit to be "operated,

supervised, controlled, or principally supported by a church or convention or association of churches" in order to receive the

49 No. 2020AP2007.rgb

tax exemption). Nonetheless, the principles underlying

Sherbert, Trinity Lutheran, and Carson have equal force when the

alleged discrimination occurs among religious institutions,

rather than between religious and secular entities.

¶170 The Sherbert-Trinity Lutheran-Carson line of cases

prohibit indirect coercion and penalties on religious exercise.

E.g., Carson, 596 U.S. at 778 (quoting Lyng, 485 U.S. at 450);

Thomas, 450 U.S. at 717-18 ("Where the state conditions receipt

of an important benefit upon conduct proscribed by a religious

faith, or where it denies such a benefit because of conduct

mandated by religious belief, thereby putting substantial

pressure on an adherent to modify his behavior and to violate

his beliefs, a burden upon religion exists."). Failure to

provide a benefit, which is otherwise available to any

religiously affiliated entity, to a religious institution

because of its religious status or religious activities

"condition[s] the availability of [a] benefit[] upon [its]

willingness to violate a cardinal principle of [its] religious faith[,] effectively penaliz[ing] the free exercise of [its]

constitutional liberties." Sherbert, 374 U.S. at 406. Even if

a benefit is available only to religiously affiliated

organizations, the denial of the benefit still pressures the

entity to forego its religious practices, forcing the entity to

"choose between following the precepts of [its] religion and

forfeiting benefits." Id. at 404. As in Sherbert, Trinity

Lutheran, and Carson, such a choice burdens the free exercise of religion.

¶171 At their core, the Religion Clauses prohibit the

government from discriminating among religions. "From the

beginning, this nation's conception of religious liberty

included, at a minimum, the equal treatment of all religious

faiths without discrimination or preference." Colo. Christian

Univ. v. Weaver, 534 F.3d 1245, 1257 (10th Cir. 2008).

Historically, England privileged the Church of England and

penalized non-established religions and practices. In the 16th

century, Parliament enacted the Thirty-nine Articles of Faith,

which determined the tenets of the Church of England and the

liturgy for religious worship. Nathan S. Chapman & Michael W.

McConnell, Agreeing to Disagree: How the Establishment Clause

Protects Religious Diversity and Freedom of Conscience 12-13

(2023). Additionally, "[t]he Acts of Uniformity of 1549, 1559,

and 1662 required all ministers to conform to these

requirements, making the Church of England the sole institution

for lawful public worship." Id. at 13. "There were also

specific 'Penal Acts' suppressing the practice of faiths whose tenets were thought to be inimical to the regime." Id. at 14.

The practice of establishing churches "of the old world [was]

transplanted and . . . thrive[d] in the soil of the new

America." Everson, 330 U.S. at 9. In the American colonies

religious dissenters were often penalized for their heterodox

religious practices. For example, in Connecticut in the 1740s,

religious dissenters were fined and imprisoned for preaching and

meeting. Philip Hamburger, Separation of Church and State 90 (2002). In Virginia, laws "fin[ed] 'scismaticall persons' who

51 No. 2020AP2007.rgb

refused to have their children baptized, prohibit[ed] the

immigration of Quakers, and outlaw[ed] Quaker religious

assemblies." Chapman & McConnell, supra, at 17.

¶172 "During the Revolution, American establishments lost

their severity," and states tended to abandon direct penalties

on non-established religions and religious practices while

retaining privileges for the established religion and religious

practices of the state. Hamburger, supra, at 89-90. By the

time the First Amendment was written, "at least ten of the

twelve state constitutional free exercise provisions required

equal religious treatment and prohibited denominational

preferences." Colo. Christian Univ., 534 F.3d at 1257 (citing

Arlin M. Adams & Charles J. Emmerich, A Heritage of Religious

Liberty, 137 U. Pa. L. Rev. 1559, 1637–39 (1989)). One of the

"essential legal elements of disestablishment" in the states was

denominational equality. Chapman & McConnell, supra, at 57.

The principle that the government cannot prefer one religion

over another has "strong historical roots and is often considered one of the most fundamental guarantees of religious

freedom." Jeremy Patrick-Justice, Strict Scrutiny for

Denominational Preferences: Larson in Retrospect, 8 N.Y.C. L.

Rev. 53, 54-55 (2005). The constitutional bar on religious

discrimination among faiths emanates from both Religion Clauses.

Larson v. Valente, 456 U.S. 228, 245 (1982); Colo. Christian

Univ., 534 F.3d at 1257.

¶173 The Supreme Court has unwaveringly affirmed the central principle that government cannot prefer one religion

52 No. 2020AP2007.rgb

over another: "The clearest command of the Establishment Clause

is that one religious denomination cannot be officially

preferred over another." Larson 456 U.S. at 244; Everson, 330

U.S. at 15 (stating that under the Establishment Clause, a state

cannot "pass laws which . . . prefer one religion over

another."); Cutter v. Wilkinson, 544 U.S. 709, 720 (2005)

(stating religious exemptions must be "administered neutrally

among different faiths"); Zorach v. Clauson, 343 U.S. 306, 314

(1952) ("The government must be neutral when it comes to

competition between sects."); Bd. of Educ. of Kiryas Joel Vill.

Sch. Dist. v. Grumet, 512 U.S. 687, 707 (1994) ("[I]t is clear

that neutrality as among religions must be honored."); Epperson

v. Arkansas, 393 U.S. 97, 103-04 (1968) ("Government in our

democracy . . . must be neutral in matters of religious theory,

doctrine, and practice. It may not . . . aid, foster, or

promote one religion or religious theory against

another . . . ."); see also Dunn v. Ray, 139 S. Ct. 661, 662

(2019) (Kagan, J., dissenting from grant of application to vacate stay) (describing denominational neutrality as "the

Establishment Clause's core principle"). "At a minimum, the

protections of the Free Exercise Clause pertain if the law at

issue discriminates against some or all religious beliefs or

regulates or prohibits conduct because it is undertaken for

religious reasons." Church of Lukumi Babalu Aye, Inc. v. City

of Hialeah, 508 U.S. 520, 532 (1993) (citations omitted); Emp.

Div., Dep't of Hum. Res. of Or. v. Smith, 494 U.S. 872, 877 (1990). State laws and practices "which happen to have a

53 No. 2020AP2007.rgb

'disparate impact' upon different religious organizations"

resulting from secular criteria do not amount to a

denominational preference or religious discrimination, but laws

that do not merely incidentally discriminate against certain

religions or religious practices receive strict scrutiny.

Larson, 456 U.S. at 246 n.23; Smith, 494 U.S. at 878; Colo.

Christian Univ., 534 F.3d at 1257.

¶174 The majority's primarily-religious-in-nature-

activities test necessarily and explicitly discriminates among

certain religious faiths and religious practices. As the

majority construes Wis. Stat. § 108.02(15)(h)2., religious

institutions that do not perform sufficiently religious acts to

satisfy the court's subjective conceptions of religiosity will

be denied the exemption. The government cannot "discriminate

between 'types of institutions' on the basis of the nature of

the religious practice these institutions are moved to engage

in." Colo. Christian Univ., 534 F.3d at 1259.

¶175 While the application of secular criteria that leads to disparate treatment of religions is not religious

discrimination, the relevant criteria under the majority's test

are not secular. The majority denies the exemption to

institutions if they do not primarily engage in activities the

court deems "religious in nature"——a criterion that can only be

described as religious. See Church of Lukumi, 508 U.S. at 533

("A law lacks facial neutrality if it refers to a religious

practice without a secular meaning discernable from the language or context."). It includes only a small, and ill-defined,

54 No. 2020AP2007.rgb

subset of religious activities. The majority employs factors

that are similarly not secular. For example, the majority asks

whether a nonprofit engages in worship services, religious

ceremonies, serves only co-religionists, or imbues program

participants with the nonprofit's faith. Such criteria

certainly sound religious, not secular.

¶176 The majority declares Catholic Charities ineligible

for the exemption because Catholic Charities do not participate

in worship services, engage in religious outreach, perform

religious ceremonies, provide religious education, "imbue

program participants with the Catholic faith[,] []or supply any

religious materials to program participants or employees."

Majority op., ¶60. Additionally, the majority denies the

exemption on the non-secular and discriminatory basis that

Catholic Charities employ and serve non-Catholics. Id., ¶61.

In the majority's view, Catholic Charities' religious practices

resemble secular social services too much. Id., ¶¶63-64, 66.

The majority's "test" compares the nonprofit's activities to an arbitrary list of stereotypical religious activities to

determine whether the activities are sufficiently religious.

Id., ¶100 (explaining that activities like those listed in

Dykema are more likely to be "religious in nature" in the eyes

of the court).

¶177 The majority's test overtly discriminates against

Catholic Charities because they follow Catholic doctrine. As

Catholic Charities explain, Catholic doctrine commands they engage in charity without limiting their assistance to fellow

55 No. 2020AP2007.rgb

Catholics and bars them from proselytizing when conducting

charitable acts. Under the Free Exercise Clause, the state

cannot condition a benefit upon the abandonment of religious

practices. The majority puts Catholic Charities to a choice:

They may receive the tax exemption by violating their religious

beliefs or they can conduct their operations in accordance with

their faith and forgo the exemption. Conditioning a benefit in

this manner burdens the free exercise of religion. Trinity

Lutheran, 582 U.S. at 462.

¶178 The majority's primarily-religious-in-nature-

activities test poses a particular danger for minority faiths.

The majority's conception of what constitutes activities that

are "religious in nature" reflects a narrow view of what

religious practice looks like. Many amici submitted briefs to

this court explaining how a test like the majority's will

discriminate against minority faiths.

¶179 The brief of the International Society for Krishna

Consciousness and the Sikh Coalition ("the Coalition") is particularly illuminating. It notes that government officials

are less likely to be familiar with minority faith traditions,

and therefore may perceive minority religious practices as less

"religious in nature" than the activities of majority

religions.24 The Coalition identifies many activities central to

their faiths but likely to fail the majority's test, which

compares a nonprofit's activities to a list of stereotypical

Amicus 24 Br. International Society for Krishna Consciousness and the Sikh Coalition, at 11.

56 No. 2020AP2007.rgb

(and largely Protestant) religious activities, because the list

is derived from a "Western" understanding of religion.25 For

example, adherents of Hare Krishna have a religious practice

called "Prasadam," during which adherents prepare food, offer it

to their deity, and distribute it to the general population.26

Sikhs have a religious practice of providing a community

kitchen, "serving free meals and allowing people of all faiths

to break bread together."27 According to the Coalition, this

practice is "foundation[al] to the Sikh way of life; it

represents the principle of equality among all people regardless

of religion . . . ."28 The Coalition rightly worries that these

religious practices will be characterized by courts as "secular

in nature" under the majority's test.

¶180 State actors cannot treat one faith's religious

practices as "religious in nature" and another's practices as

"secular in nature." Cf. Fowler v. Rhode Island, 345 U.S. 67,

70 (1953) ("To call the words which one minister speaks to his

congregation a sermon, immune from regulation, and the words of another minister an address, subject to regulation, is merely an

indirect way of preferring one religion over another."). The

United States Supreme Court subjects such overt religious

discrimination to strict scrutiny. See, e.g., Espinoza, 140 S.

25 Id. at 11-13. 26 Id. at 12-13. 27 Id. at 13. 28 Id.

57 No. 2020AP2007.rgb

Ct. at 2278 (Gorsuch, J., concurring) (stating "any

discrimination against religious exercise must meet the demands

of strict scrutiny"). A government policy satisfies strict

scrutiny only if it "advances 'interests of the highest order'

and is narrowly tailored to achieve those interests." Fulton v.

City of Philadelphia, 593 U.S. 522, 541 (2021) (quoting Church

of Lukumi, 508 U.S. at 546). "That standard 'is not watered

down'; it 'really means what it says.'" Tandon v. Newsom, 593

U.S. 61, 65 (2021) (per curiam) (quoting Church of Lukumi, 508

U.S. at 546). As scholars have noted, however, "'[i]t is

difficult to imagine the circumstances under which the

government would have a compelling need to prefer some religions

over others." Richard F. Duncan, The Clearest Command of the

Establishment Clause: Denominational Preferences, Religious

Liberty, and Public Scholarships that Classify Religions, 55

S.D. L. Rev. 390, 392 (2010) (alteration in original) (quoting

Ronald D. Rotunda & John E. Nowak, Treatise on Constitutional

Law: Substance and Procedure 14 (3d ed. 1999)); see also Church of Lukumi, 508 U.S. at 578-80 (Blackmun, J., concurring in the

judgment) (arguing a law that discriminates against religion

automatically fails strict scrutiny because such a law in not

narrowly tailored "by definition").

¶181 LIRC does not even suggest the state has a compelling

interest in denying the exemption under Wis. Stat.

§ 108.02(15)(h)2. in a manner that discriminates among the

various faiths. LIRC, like the majority, misunderstands Catholic Charities' asserted burden on the free exercise of

58 No. 2020AP2007.rgb

their religion. LIRC believes the asserted burden is paying a

tax. In response to this misconception of Catholic Charities'

claim, LIRC asserts the whole of Wis. Stat. ch. 108 is justified

by the compelling interest in "providing broad unemployment

insurance access to workers . . . ." LIRC then argues the law

is narrowly tailored because "it is impossible to construct

workable tax laws that account for the 'myriad of religious

beliefs.'" LIRC's arguments miss the mark. Under strict

scrutiny, LIRC needed to provide a compelling interest

justifying the discrimination between religions. See Fulton,

593 U.S. at 541; Colo. Christian Univ., 534 F.3d at 1269. LIRC

failed to do so. This court cannot invent justifications for

the state to save the statute from unconstitutionality. See

Colo. Christian Univ., 534 F.3d at 1268 ("We cannot and will not

uphold a statute that abridges an enumerated constitutional

right on the basis of a factitious governmental interest

. . . ."); Redeemed Christian Church of God (Victory Temple)

Bowie v. Prince George's Cnty., 17 F.4th 497, 510-11 (4th Cir. 2021) (citation omitted) ("To survive strict scrutiny review,

the government must show that pursuit of its compelling interest

was the actual reason for its challenged action."); Kennedy v.

Bremerton Sch. Dist., 597 U.S. 507, 543 n.8 (2022) (quoting

United States v. Virginia, 518 U.S. 515, 533 (1996)) (noting

"'justification[s]' for interfering with First Amendment rights

'must be genuine, not hypothesized or invented post hoc in

response to litigation'"). In the absence of any compelling interest to justify the state's discrimination among religions,

59 No. 2020AP2007.rgb

§ 108.02(15)(h)2., as interpreted by the majority, cannot

survive strict scrutiny.

¶182 This case illustrates the interconnection between the

right to free exercise and the Constitution's bar on religious

establishments. Citizens are inhibited from freely practicing

their faiths when the government doles out benefits or imposes

penalties on the basis of religious practice. As Justice Neil

Gorsuch explained:

The First Amendment protects religious uses and actions for good reason. What point is it to tell a person that he is free to be Muslim but he may be subject to discrimination for doing what his religion commands, attending Friday prayers, living his daily life in harmony with the teaching of his faith, and educating his children in its ways? What does it mean to tell an Orthodox Jew that she may have her religion but may be targeted for observing her religious calendar? Often, governments lack effective ways to control what lies in a person's heart or mind. But they can bring to bear enormous power over what people say and do. The right to be religious without the right to do religious things would hardly amount to a right at all. Espinoza, 140 S. Ct. at 2277 (Gorsuch, J., concurring). The "free competition between religions" protected by the

Establishment Clause requires "that every denomination . . . be

equally at liberty to exercise and propagate its beliefs. But

such equality would be impossible in an atmosphere of official

denominational preference." Larson, 456 U.S. at 245. The

Religion Clauses "make room for as wide a variety of beliefs and

creeds as the spiritual needs of man deem necessary" by

"sponsor[ing] an attitude on the part of government that shows no partiality to any one group and that lets each flourish

60 No. 2020AP2007.rgb

according to the zeal of its adherents and the appeal of its

dogma." Zorach, 343 U.S. at 313. "Free exercise thus can be

guaranteed only when legislators——and voters——are required to

accord to their own religions the very same treatment given to

small, new, or unpopular denominations." Larson, 456 U.S. at

245.

¶183 While the Free Exercise Clause does not require the

state to provide a tax exemption to religious nonprofits,

"[w]hat benefits the government decides to give, whether meager

or munificent, it must give without discrimination against

religious conduct." Espinoza, 140 S. Ct. at 2277 (Gorsuch, J.,

concurring). In our constitutional order, there are no second-

class religions or religious practices. The Religion Clauses

bar discrimination against religious status, beliefs, and

practices: "Eliminating [religious] discrimination means

eliminating all of it." See Students for Fair Admissions, Inc.

v. President & Fellows of Harvard Coll., 600 U.S. 181, 206

(2023). The majority errs by inventing and operationalizing a test that discriminates against Catholic Charities' religious

practices——and those of many faith traditions going forward.

¶184 The protection against religious preferences embodied

in the First Amendment is even more explicit in the Wisconsin

Constitution, which bars the state from giving "any preference .

. . by law to any religious establishments or modes of

worship."29 Wis. Const. art. I, § 18; Coulee Cath. Schs., 320

Article I, 29 section 18 of the Wisconsin Constitution provides in full:

61 No. 2020AP2007.rgb

Wis. 2d 275, ¶60 (explaining the Wisconsin Constitution

"provid[es] expansive protections for religious liberty" beyond

what the First Amendment provides). As this court proclaimed in

Weiss, Article I, section 18 of the Wisconsin Constitution,

sometimes called the No Preference Clause,30 "probably furnished

a more complete bar to any preference for, or discrimination

against, any religious sect, organization, or society than any

other state in the Union." State ex rel. Weiss v. Dist. Bd. of

Sch. Dist. No. 8 of City of Edgerton, 76 Wis. 177, 208, 44 N.W.

967 (1890) (Cassoday, J., concurring).31

¶185 The majority's interpretation of Wis. Stat.

§ 108.02(15)(h)2. blatantly violates the No Preference Clause.

In Weiss, this court explained that the phrase "modes of

worship" is capacious, embracing "any and every mode of

worshiping the Almighty God." Id. at 211-12. It includes

The right of every person to worship Almighty God according to the dictates of conscience shall never be infringed; nor shall any person be compelled to attend, erect or support any place of worship, or to maintain any ministry, without consent; nor shall any control of, or interference with, the rights of conscience be permitted, or any preference be given by law to any religious establishments or modes of worship; nor shall any money be drawn from the treasury for the benefit of religious societies, or religious or theological seminaries.

King v. Vill. of Waunakee, 185 Wis. 2d 25, 61, 517 N.W.2d 30

671 (1994) (Heffernan, C.J., dissenting).

While the discussion appears in the concurring opinion of 31

Justice Cassoday, it was on a subject expressly reserved for his consideration, which makes it the opinion of the court. State ex rel. Reynolds v. Nusbaum, 17 Wis. 2d 148, 165 n.3, 115 N.W.2d 761 (1962).

62 No. 2020AP2007.rgb

"'the performance of all those external acts, and the observance

of those rites and ceremonies, in which men engage with the

professed and sole view of honoring God.'" Id. at 212 (listing

additional dictionary definitions). Because the statute, under

the majority's interpretation, provides benefits for religiously

affiliated nonprofits that engage in activities the court deems

"religious in nature," it prefers some modes of worship over

others. Catholic Charities explained that charitable works are

a form of worship for Catholics, who may not proselytize while

engaged in acts of charity. The majority denies the exemption

to Catholic Charities because they did not engage in other modes

of worship, like proselytizing. The majority's test prefers

some types of worship (e.g., proselytizing) over others (e.g.,

religiously motivated charity).

¶186 Instead of addressing the Wisconsin Constitution's

impact on this case, the majority dodges the issue, dismissing

it in a footnote as "undeveloped." Majority op., ¶3 n.4. But

that is not true. The Wisconsin Legislature, as amicus curiae, thoroughly explains in its brief why a test like the one

employed by the majority violates the No Preference Clause.

That clause "operate[s] as a perpetual bar to the state . . .

giving . . . any preference by law to any religious sect or mode

of worship." Weiss, 76 Wis. at 210-11. The majority's

63 No. 2020AP2007.rgb

preference for some religious practices over others violates the

Wisconsin Constitution.32

B. Religious Entanglement

¶187 The Establishment Clause provides, "Congress shall

make no law respecting an establishment of religion," U.S.

Const. amend. I, and "prohibits the excessive entanglement of

the state in religious matters." St. Augustine Sch., 398 Wis.

2d 92, ¶42 (citing L.L.N. v. Clauder, 209 Wis. 2d 674, 686, 563

N.W.2d 434 (1997)). The Establishment Clause precludes the

state from making "intrusive judgments regarding contested

questions of religious belief or practice." Colo. Christian

Univ., 534 F.3d. at 1261. "[T]he Religion Clauses protect the

right of churches and other religious institutions to decide

matters of faith and doctrine without government intrusion . . .

and any attempt by government to dictate or even to influence

such matters . . . constitute[s] one of the central attributes

of an establishment of religion." Our Lady of Guadalupe Sch. v.

Morrissey-Berru, 591 U.S. ___, 140 S. Ct. 2049, 2060 (2020) (internal citations and quotations marks omitted).

¶188 Civil courts may answer only factual and legal

questions; they lack any authority or competency to answer

theological questions. Presbyterian Church in U.S. v. Mary

Elizabeth Blue Hull Mem'l Presbyterian Church, 393 U.S. 440,

Because the majority dodges the religious discrimination 32

issues presented by its test, litigants likely will bring such claims in the future, forcing the majority to admit its error. "This decision might as well be written on the dissolving paper sold in magic shops." Fulton v. City of Philadelphia, 593 U.S. 522, 551 (2021) (Alito, J., concurring in the judgment).

64 No. 2020AP2007.rgb

445-47, 449-50 (1969). As James Madison explained in his

Memorial and Remonstrance, the idea that a "Civil Magistrate is

a competent Judge of Religious truth . . . is an arrogant

pretension" that has been "falsified" by history. James

Madison, Memorial and Remonstrance Against Religious

Assessments, reproduced in Everson, 330 U.S. at 67 (appendix to

dissent of Rutledge, J.). The majority's opinion proves

Madison's thesis. The majority's interpretation of Wis. Stat. §

108.02(15)(h)2. not only encourages excessive entanglement with

religion, it compels such entanglement.

¶189 The majority's requirement that a nonprofit's

activities be primarily "religious in nature" forces courts to

answer debatable theological questions courts have no authority

to answer. The majority's test requires courts to decide what

activities are sufficiently religious to qualify as "religious

in nature." The First Amendment bars the government from

ranking activities on a scale from least to most religious. See

Thomas, 450 U.S. at 714 ("The determination of what is a 'religious' belief or practice is more often than not a

difficult and delicate task . . . . However, the resolution of

that question is not to turn upon a judicial perception of the

particular belief or practice in question; religious beliefs

need not be acceptable, logical, consistent, or comprehensible

to others in order to merit First Amendment protection.").

"Courts are not arbiters of scriptural interpretation," and this

court cannot choose which religiously motivated actions are, in their essence, religious. Id. at 716. A court cannot decide

65 No. 2020AP2007.rgb

whether an organization primarily conducts activities that are

"religious in nature" without violating the First Amendment.

¶190 Determining whether an organization's activities are

primarily "religious in nature" will lead to examining the

activities performed by nonprofits, which will be forced to

prove whether their religiously motivated activities are

sufficiently religious. "What makes the application of a

religious-secular distinction difficult is that the character of

an activity is not self-evident. As a result, determining

whether an activity is religious or secular requires a searching

case-by-case analysis. This results in considerable ongoing

government entanglement in religious affairs." Amos, 483 U.S.

at 343 (Brennan, J., concurring in the judgment); Espinosa v.

Rusk, 634 F.2d 477, 481 (10th Cir. 1980), aff'd, 456 U.S. 951

(1982).

¶191 For example, religious schools will be forced to

defend the religious nature of textbooks, class instruction,

examinations, fieldtrips, employees, students, parents, and more. "[T]his sort of detailed inquiry into the subtle

implications of in-class examinations and other teaching

activities would itself constitute a significant encroachment on

the protections of the First and Fourteenth Amendments." New

York v. Cathedral Acad., 434 U.S. 125, 132 (1977). "The

prospect of church and state litigating in court about what does

or does not have religious meaning touches the very core of the

constitutional guarantee against religious establishment . . . ." Id. at 133; accord Presbyterian Church

66 No. 2020AP2007.rgb

in U.S., 393 U.S. at 449 ("First Amendment values are plainly

jeopardized when . . . litigation is made to turn on the

resolution by civil courts of controversies over religious

doctrine and practice."). The intrusive inquiries the

majority's test demands may recur. While a court initially may

deem a nonprofit's activities primarily "religious in nature,"

the nonprofit may later lose its exempt status. See Walz v. Tax

Comm'n, 397 U.S. 664, 673 (1970) ("Qualification for tax

exemption is not perpetual or immutable[.]"). The majority

gives the state license to monitor whether nonprofits fail to

hit the proper ratio of activities that are "religious in

nature" to "secular in nature." "'[P]ervasive monitoring' for

'the subtle or overt presence of religious matter' is a central

danger against which [the Court has] held the Establishment

Clause guards." See Hernandez v. Comm'r, 490 U.S. 680, 694

(1989) (citations omitted). To force religious entities to

repeatedly satisfy the state that their activities are

"religious in nature" is anathema to the First Amendment. ¶192 The majority's primarily-religious-in-nature-

activities test puts state officials and courts in the

constitutionally tenuous position of second-guessing the

religious significance and character of a nonprofit's actions.

Catholic Charities strenuously maintain their charitable

activities are religious and central to their faith.

Nevertheless, this court rejects Catholic Charities'

understanding of the religious significance of their own activities, insisting those activities are actually "secular in

67 No. 2020AP2007.rgb

nature." The First Amendment forbids such second-guessing and

recharacterization of Catholic Charities' activities. Lyng, 485

U.S. at 457-58 ("[T]he dissent's approach would require us to

rule that some religious adherents misunderstand their own

religious beliefs. We think such an approach cannot be squared

with the Constitution or with our precedents, and that it would

cast the Judiciary in a role that we were never intended to

play."); Thomas, 450 U.S. at 716 ("[I]t is not within the

judicial function and judicial competence to inquire whether the

petitioner or his fellow worker more correctly perceived the

commands of their common faith.").

¶193 The entanglement occasioned by the impermissible

second-guessing of sincere religious claims is compounded by the

majority's claim that what constitutes an activity that is

"religious in nature" "may be different for different faiths."

Majority op., ¶55. The majority has already made clear it will

not take nonprofits at their word that their activities are

"religious in nature." For what constitutes an activity that is "religious in nature" to change from religion to religion, the

court must study the doctrines of the various faiths and decide

for itself what religious practices are actually religious. The

Constitution bars civil courts from such intrusions into

spiritual affairs. Jones v. Wolf, 443 U.S. 595, 602 (1979)

(stating civil courts are barred from "resolving . . . disputes

on the basis of religious doctrine and practice"). "Plainly,

the First Amendment forbids civil courts from" "determin[ing] matters at the very core of a religion——the interpretation of

68 No. 2020AP2007.rgb

particular church doctrines and the importance of those

doctrines to the religion." Presbyterian Church in U.S., 393

U.S. at 450. The majority opinion strikes at the heart of

religious autonomy.

¶194 The majority denies Catholic Charities the exemption

under Wis. Stat. § 108.02(15)(h)2. in part because they employ

and serve those of other religions. This is not a lawful

criterion. Courts are not allowed to determine who is and is

not a co-religionist. "[W]ho or what is Catholic . . . is an

inquiry that the government cannot make." Holy Trinity, 82 Wis.

2d at 150-51. Deciding who is and is not a co-religionist is

plagued with entanglement problems. Are those no longer

practicing a faith co-religionists? Our Lady, 140 S. Ct. at

2069. Who decides? "Would the test depend on whether the

person in question no longer considered himself or herself to be

a member of a particular faith? Or would the test turn on

whether the faith tradition in question still regarded the

person as a member in some sense?" Id. "What characteristics, professions of faith, or doctrinal tenets render a [person] part

of a particular denomination? The statute doesn't tell us, and

it would be unconstitutional for any state actor, including a

court, to resolve the question." St. Augustine Sch., 398 Wis.

2d 92, ¶138 (Rebecca Grassl Bradley, J., dissenting). Who

constitutes a co-religionist is a religious, not legal,

question. Colo. Christian Univ., 534 F.3d at 1264-65 (noting

such a question "requires [the state] to wade into issues of religious contention").

69 No. 2020AP2007.rgb

¶195 Whether a nonprofit engages in religious education or

"imbue[s] program participants with the Catholic faith" presents

additional entanglement problems. Majority op., ¶60. The court

must decide what constitutes religious education and evangelism—

—religious questions whose answers will vary from faith to

faith. Does conducting charity as an illustration of the love

of one's deity count? What about engaging in a commercial

enterprise to illustrate one's faith applied to daily life? See

Golden Rule Church Ass'n, 41 T.C. 719. "What principle of law

or logic can be brought to bear to contradict a believer's

assertion that a particular act" educates others about his faith

and acts as a form of proselytizing or evangelism? See Smith,

494 U.S. at 887. Whether activities are "'[religious

education]' or mere 'education' depends as much on the

observer's point of view as on any objective evaluation of the

educational activity." Colo. Christian Univ., 534 F.2d. at

1263. "The First Amendment does not permit government officials

to sit as judges of the 'indoctrination' quotient" of a nonprofit. Id. Similar problems abound with the majority's

declaration that activities involving worship services and

religious ceremonies are more "religious in nature." See

Agudath Israel of Am. v. Cuomo, 983 F.3d 620, 633-34 (2d Cir.

2020) ("The government must normally refrain from making

assumptions about what religious worship requires."). The

majority's criteria invite the state and courts to make

religious determinations and second-guess the sincere assertions of religiosity of those operating nonprofits.

70 No. 2020AP2007.rgb

¶196 The majority does not deny its inquiry entangles

church and state, but simply asserts that the entanglement

occasioned by its misreading of Wis. Stat. § 108.02(15)(h)2. is

"inherent in any statutory scheme that offers tax exemption to

religious entities"33——a preposterous claim in light of the

majority's failure to properly interpret the statute, which

simply requires the nonprofit's motivations be religious.34 The

majority believes its consideration of whether a nonprofit

primarily performs activities "religious in nature" does not

unduly entangle government and religion because its inquiry is a

"neutral and secular inquiry based on objective criteria."

Majority op., ¶86. But there is nothing neutral, secular, or

objective about the majority's test for whether activities are

"religious in nature." The majority's test asks whether the

activities are similar——in some undefined and arbitrary way——to

stereotypical religious activities listed in a Seventh Circuit

decision, which made the list up from whole cloth. See id.,

¶100 (stating that "if one of the religiously motivated sub- entities in this case partook in activities such as those cited

by the Dykema court as indicative of a religious purpose" the

court would be more likely to decide it is operated primarily

33 Majority op., ¶86. 34 The majority claims that without an examination of a nonprofit's activities, it wouldn't be possible for a nonprofit to qualify for a tax exemption premised on a "religious purposes" requirement. See id., ¶93 (citing Ecclesiastical Order of Ism of Am, Inc. v. Chasin, 653 F. Supp. 1200, 1205 (E.D. Mich. 1986)). Of course, the court could simply accept Catholic Charities' sincere claims that they operate for religious purposes.

71 No. 2020AP2007.rgb

for religious purposes). The test does not "rel[y] exclusively

on objective, well-established concepts of . . . law familiar to

lawyers and judges." Jones, 443 U.S. at 603. Instead, it

relies upon each justice's subjective sense of what is genuinely

religious and what is not.

¶197 While the majority does not ask "whether [Catholic

Charities] are 'Catholic' enough to qualify for the exemption,"

majority op., ¶85, the majority improperly entangles itself with

religion by asking whether Catholic Charities' concededly

religious activities are sufficiently religious. The majority's

protestation that its decision doesn't "intrude on questions of

religious dogma"35 is dystopian——"a manner of Orwellian newspeak

by which 'religious' means something other than 'religious.'"

St. Augustine Sch., 398 Wis. 2d 92, ¶141 (Rebecca Grassl

Bradley, J., dissenting). The majority doesn't simply answer

"'delicate' questions," majority op., ¶87, it treads where the

Constitution forbids the judiciary from intruding.

IV. CONCLUSION ¶198 The majority's decision constitutes a profound

overreach of the judicial power. The majority radically

transforms Wis. Stat. § 108.02(15)(h)2., which provides a tax

exemption for nonprofits managed primarily for a religious

reason "and operated, supervised, controlled, or principally

churches[.]" Finding the exemption too broad as a matter of

policy, the majority excludes nonprofits it deems insufficiently

35 Id., ¶87.

72 No. 2020AP2007.rgb

religious. As newly interpreted, the statute violates the First

Amendment and the Wisconsin Constitution. The majority's

primarily-religious-in-nature-activities test embodies an

unlawful preference for some religious practices and thereby

discriminates against others. The test also requires courts to

answer theological questions well beyond the judiciary's

purview. The majority exercises the power of the legislature,

rewriting § 108.02(15)(h)2., and proclaims itself the arbiter of

what is and is not religious. Whatever authority the majority

believes it possesses to assume these roles is not found in the

Wisconsin Constitution. I respectfully dissent.

¶199 I am authorized to state that Chief Justice ANNETTE

KINGSLAND ZIEGLER joins ¶¶110-61 and ¶¶163-98 of this dissent.

73 No. 2020AP2007.bh

¶200 BRIAN HAGEDORN, J. (dissenting). Although I would

not reach the constitutional questions and do not sign onto

every point in the analysis, I agree with the construction of

the statute in Justice Rebecca Grassl Bradley's thoughtful

dissent. I also agree with the excellent discussion of the

majority's misplaced reliance on the remedial statute canon.

Justice Rebecca Grassl Bradley's dissent, ¶¶154-58. There is no

particular reason to assume a statutory exemption in an area

like religious freedom——a constitutionally protected category to

which the law regularly gives wide latitude——should be construed

narrowly. I respectfully dissent.

1 No. 2020AP2007.bh