Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Comm'n. Revisions: 6/06/25
24-154
| SCOTUS | Jun 5, 2025Background
- Catholic Charities Bureau, Inc., and four subentities, all operated under the authority of the Roman Catholic Diocese of Superior, Wisconsin, sought exemption from Wisconsin's unemployment compensation tax as religious organizations.
- Wisconsin law exempts nonprofits "operated primarily for religious purposes" and controlled by a church from paying unemployment taxes.
- Petitioners are controlled by the Diocese, but their charitable work is open to all and does not include proselytization or limit services to Catholics, following Catholic doctrine.
- The Wisconsin Supreme Court denied them exemption, interpreting the statute to require proselytization or religious limitation in services for the exemption to apply.
- Petitioners claimed this interpretation violates the First Amendment by favoring certain religious practices and doctrines over others.
- The procedural posture is review on writ of certiorari after the Wisconsin Supreme Court affirmed denial of the exemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Wisconsin's interpretation violate First Amendment neutrality between religions? | Exemption interpreted to favor certain theological practices (proselytization or exclusive service) over others, imposing unconstitutional denominational preference. | The exemption's criteria are not invidiously discriminatory; they are based on religious activity, not preference between religions. | Wisconsin's interpretation creates a denominational preference and violates First Amendment neutrality. |
| Is strict scrutiny the correct standard? | Yes, because the law differentiates between religions based on theological choices, not secular criteria. | No, unless there is invidious discrimination, referencing Gillette v. United States; strict scrutiny should not automatically apply. | Strict scrutiny applies because the regime differentiates on inherently theological (religious) lines. |
| Is the Wisconsin religious exemption regime narrowly tailored to further compelling state interests? | No, because the regime is both underinclusive and overinclusive relative to state interests, and petitioners have their own unemployment system. | Yes, regime serves compelling interests in ensuring unemployment coverage and avoiding church-state entanglement. | The regime is not narrowly tailored; poor fit between the state's interests and the exemption's criteria. |
| Does the statute's application violate church autonomy doctrine? (Thomas, concurring) | Court should defer to the Diocese's determination that Catholic Charities is an arm of the Church, regardless of corporate structure. | The state may treat distinct corporate entities as separate for tax purposes. | Failure to defer to the church's internal structure violates church autonomy (Thomas concurrence). |
Key Cases Cited
- Larson v. Valente, 456 U.S. 228 (Supreme Court applies strict scrutiny to laws that create denominational preferences)
- Gillette v. United States, 401 U.S. 437 (Accommodation available equally to all religions does not violate neutrality)
- Watson v. Jones, 13 Wall. 679 (Civil courts must not decide ecclesiastical questions or interfere with church governance)
- Serbian Eastern Orthodox Diocese v. Milivojevich, 426 U.S. 696 (Deference required to church’s internal decisions on governance and polity)
- Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U.S. 171 (Church autonomy doctrine protects internal decisions from state interference)