Litigation Update

Litigation Update
May 1, 2001


Favorable Ruling for Arizona Tax Credits

In 1999, the U.S. Supreme Court refused to hear a challenge to an Arizona Supreme Court ruling that upheld a law allowing parents to take tax credits for donations to groups funding scholarships for religious school students.

Thus defeated in state court, the American Civil Liberties Union in March 2000 filed a new challenge to the law in federal court, alleging the program is unconstitutional in practice on First Amendment grounds because the vast majority of scholarships are used by families in religious schools.

In March 2001, the federal district court in Phoenix dismissed the ACLU challenge on jurisdictional grounds, holding that under the Tax Injunction Act, the plaintiffs are required to pursue claims against allegedly unconstitutional tax-related programs in state court.

Since the plaintiffs already have lost the case in state court, they are expected to appeal to the Ninth Circuit Court, according to attorneys with the Institute for Justice, which is defending the program.



U.S. Supreme Court Next Stop for Cleveland Voucher Program

In 1997, the Ohio Supreme Court ruled that the Cleveland voucher program is constitutional, but struck down the law that created it on procedural grounds. After lawmakers re-enacted the program, it was challenged in federal court and in 1999 U.S. District Court Judge Solomon Oliver Jr. declared the school choice program unconstitutional. However, the U.S. Supreme Court subsequently acted to stay an injunction that would have halted the program's operation.

Last December, the U.S. Sixth Circuit Court of Appeals in Cincinnati ruled 2-1 to uphold Judge Solomon's decision that the Cleveland program is unconstitutional. The Institute for Justice, which is defending the program on behalf of five Cleveland families, entered a petition for the case to be reviewed by the 13 judges of the entire Sixth Circuit Court. The Court denied that petition on February 28, allowing the panel's decision to stand but clearing the way for an appeal to the U.S. Supreme Court, which the Institute intends to file.

"We are now only one step away from the definitive U.S. Supreme Court ruling on the constitutionality of school choice," said Clint Bolick, the Institute's vice president and litigation director. "The Sixth Circuit's decision is inconsistent with decisions of the Wisconsin and Ohio state supreme courts. Now is the time for the U.S. Supreme Court to resolve this conflict."

In response to the Institute's request, on March 8 Judge Eric Clay of the U.S. Court of Appeals for the Sixth Circuit issued a stay of the injunction so that the program can continue until the U.S. Supreme Court has resolved the case. The National Education Association asked the court to issue a stay of shorter duration that could have jeopardized the program for next year, but the court declined that suggestion.

Based on the pattern of recent high court decisions, the expected timeline of events is as follows:

  • September-October 2001: Court decides whether to take the case;
  • December 2001-March 2002: Oral arguments;
  • June 2002: Supreme Court hands down decision.

While school choice advocates are optimistic about the Court's ruling on the constitutionality of the voucher program--particularly in light of the Court's reasoning in Mitchell v. Helms last year--one element of unpredictability is the possible resignation of one or more justices before the case is decided.