Pulido v. Bennett

ORDER

JOHN R. GIBSON, Circuit Judge.

Following the issuance of our opinion in this case on June 2, 1988, 848 F.2d 880, a timely motion for rehearing was filed by the appellants. We called for responses, and while the motion for rehearing was pending before the court, the Supreme Court issued its decision in Bowen v. Kendrick, — U.S. -, 108 S.Ct. 2562, 101 L.Ed.2d 520 (1988). In our earlier opinion we denied federal taxpayer standing to ap-pellees Pulido, Gooden, and Dalton, who sought to argue that executive implementation of a congressional spending program violated the establishment clause. We based our reasoning on Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), and Valley Forge Christian College v. Americans United For Separation of Church and State, 454 U.S. 464, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). Now, in light of Kendrick, we are convinced that our earlier decision must be modified with regard to this standing issue.

Our earlier rejection of taxpayer standing was based on a reading of Flast and Valley Forge that distinguished between congressional and executive action. We felt that executive power “arguably authorized” by statute did not establish a sufficient nexus between federal taxpayer status and Congress’ Article I taxing and spending power. Since we agreed with the district court that the questioned action was executive in nature, we upheld that court’s ruling denying standing.

However, the Supreme Court’s decision in Kendrick, handed down twenty-seven days after our original ruling, makes clear that federal taxpayers do have standing to raise establishment clause challenges to executive administration of congressional spending programs. Id., 108 S.Ct. at 2579.

Kendrick involved a taxpayer challenge to grants made by the Secretary of Health and Human Services in administering the Adolescent Family Life Act (AFLA), Pub.L, 97-35, 95 Stat. 578 (codified as amended at 42 U.S.C. §§ 300z — 300z-10 (1982 & Supp. Ill 1985)). Kendrick, 108 S.Ct. at 2566. In ruling that federal taxpayers had standing to challenge the statute as applied, the Supreme Court rejected our executive/congressional action distinction, observing that “[t]he AFLA is at heart a program of disbursement of funds pursuant to Congress’ taxing and spending powers,” and “appellees’ claims call into question how the funds authorized by Congress are being disbursed pursuant to the AFLA statutory mandate.” Id. at 2580. The Court concluded “there is thus a sufficient nexus between the taxpayer’s standing as a taxpayer and the congressional exercise of taxing and spending power, notwithstanding the role the Secretary plays in administering the statute.” Id. (footnote omitted).

The taxpayer’s claims in this case are analogous to those involved in Kendrick. Here the taxpayers challenge the Secretary’s method of disbursing congressionally authorized funds to the Blue Hills Homes Corporation (BHHC), and the guidelines the Secretary has issued regarding the BHHC’s use of these funds to provide Chapter I services to parochial school students. Compare Kendrick, 108 S.Ct. at 2569, 2580-81. The Department of Education has attempted to distinguish Kendrick by arguing that the AFLA sets forth more specific grant criteria than does Chapter I, creating a more direct nexus between the taxpayers’ claims and the challenged statute than we have in this case. The Department additionally argues that the taxpayers here have not shown they suffered an actual injury as a result of the Department’s actions. Each of these arguments is without merit.

First, the statutory criteria governing the Secretary’s administration of Chapter I, while fewer in number, are comparable in specificity to the provisions of the AFLA. Compare Kendrick, 108 S.Ct. at 2566, with 20 U.S.C. § 3806(b) (incorporating the requirements of 20 U.S.C. §§ 3804(c), 3805(b)(1), (2), (3) and (4), 3806(a), and 3807(b)). Both statutes leave the administrator discretion to define exactly what types of services will be provided. See Kendrick, 108 S.Ct. at 2566; 20 U.S.C. § 3806(a). Second, there is no question that the taxpayers have alleged actual injury resulting from the arrangements the Secretary has made under 29 U.S.C. § 3806(b) for the public funding and delivery of Chapter I services to parochial school students. See generally Aquilar v. Felton, 473 U.S. 402, 105 S.Ct. 3232, 87 L.Ed.2d 290 (1985). Whether their claims have merit is, of course, an issue which can only be addressed at trial.

We hold that under Bowen v. Kendrick federal taxpayers have standing to challenge the Department of Education’s implementation of Chapter I. Accordingly, we modify our earlier decision and reverse the order of the district court denying Pulido, Gooden, and Dalton federal taxpayer standing. Our reversal of the order denying Secretary Bennett qualified immunity remains unchanged.

The judgment of the district court is affirmed in all other respects. We remand for further proceedings.