Niehaus v. Huppenthal, 233 Ariz. 195

Background

Arizona enacted the Empowerment Scholarship Accounts (ESA) program to provide education scholarships (90% of the base support level) for students with disabilities who previously attended public school or received certain scholarships.
Parents receiving ESA funds must agree to educate the child in reading, grammar, math, social studies, and science and not enroll the child in a public school while receiving ESA funds.
ESA funds may be used for a wide range of educational uses (tuition at qualified schools, curricula, tutoring, therapies, online programs, tests, postsecondary tuition, etc.), and may be spent at religious, nonreligious, or public institutions.
Niehaus challenged the ESA in state court, arguing it violated the Arizona Constitution’s Religion Clause (Art. II, § 12), Aid Clause (Art. IX, § 10), and unlawfully conditioned a public benefit on waiver of a constitutional right; she sought injunctive relief.
The trial court dismissed part of the complaint, denied injunctive relief, and ruled for the Superintendent; the court of appeals affirmed, reviewing constitutional questions de novo and presuming statutes constitutional.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Religion Clause (Art. II, § 12) — does ESA unlawfully apply public money to religious instruction/establishments?	Niehaus argued ESA would result in public funds reaching religious schools, violating the state Religion Clause.	Huppenthal/Intervenors argued ESA is neutral, channels funds via private parental choice, and does not advance religion.	Court held ESA is neutral, private-choice–driven, does not advance religion, and does not violate the Religion Clause.
Aid Clause (Art. IX, § 10) — is ESA an unconstitutional appropriation in aid of private/sectarian schools?	Niehaus contended ESA diverts public education funds to private/sectarian schools in violation of the Aid Clause.	Defendants argued ESA’s specified object is beneficiary families, not schools; funds are not pre- earmarked for private institutions and can be used at public institutions.	Court held ESA does not constitute an appropriation in aid of private/sectarian schools because funds are not earmarked for such schools and beneficiaries control use.
Unconstitutional conditions — does ESA condition a public benefit on waiver of constitutional right to public education?	Niehaus argued requiring parents to release public-school enrollment and obligations is an unconstitutional waiver/forfeiture of the right to a free public education.	Defendants argued the restriction merely prevents simultaneous public enrollment while receiving ESA funds; the right is voluntary, reversible, and not permanently forfeited.	Court held the ESA condition is not an unconstitutional waiver: restriction is temporary/reversible, not coercive, and does not permanently surrender the right.
Standing / procedural — (alternative defenses)	Niehaus sought relief as plaintiff.	Intervenors and Superintendent argued Niehaus lacked standing on some claims.	Court resolved claims on the merits (found no unconstitutional condition) and did not need to resolve standing for that issue.

Key Cases Cited

Kotterman v. Killian, 193 Ariz. 273, 972 P.2d 606 (1999) (upheld neutrality/attenuation analysis for programs benefiting religious schools indirectly and treated tax credit as not an appropriation)
Cain v. Horne (Cain II), 220 Ariz. 77, 202 P.3d 1178 (2009) (invalidated voucher programs as direct appropriations to private schools under Aid Clause; explained limits of the true-beneficiary argument)
Community Council v. Jordan, 102 Ariz. 448, 432 P.2d 460 (1967) (rejected blanket ban on channeling public funds through religious organizations; focus on whether funds encourage preference for religion)
Witters v. State Commission for the Blind, 112 Wash.2d 363, 771 P.2d 1119 (1989) (Washington case holding vocational aid for explicit religious instruction violated state religion clause; relied on by plaintiff but distinguished by court)