NEW YORK v. CATHEDRAL ACADEMY

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Argument of Jean M. Coon

Chief Justice Warren E. Burger: We will hear arguments next in Number 76-616 New York against Cathedral Academy.

Mrs. Coon, you may proceed whenever you are ready.

Ms Jean M. Coon: Mr. Chief Justice and may it please the Court.

In this appeal, there is presented to this Court at least a collateral if not a direct descendant of this Court's decision in Levitt v. Committee for Public Education & Religious Liberty decided in 1973.

In that case, this Court held invalid under the First Amendment to the constitution of the United States, a New York statute enacted in 1970 which had provided reimbursement to non public schools for the costs of certain State mandated record keeping and testing services and so doing this Court affirmed a decision of the United States District Court for the Southern District of New York which had invalidated the statute primarily on the basis that the tests --

Unknown Speaker: Well, what year was that?

Ms Jean M. Coon: The federal District Court, the District Court was 1972.

Unknown Speaker: And ours was 1973.

Ms Jean M. Coon: It was 1973.

Unknown Speaker: It was April 1972.

Was not it in the middle of school year --

Ms Jean M. Coon: Yes, it was.

Unknown Speaker: Or during the school year.

Ms Jean M. Coon: It was during the school year and it was -- the statute provided for annual payments in two installments, one of which had been made for 1971-72 school year and the other one had yet to be made and in fact a preliminary injunction was issued by the District Court, I believe about two days prior to the earliest date on which that second payment could have been made.

Unknown Speaker: And these were really reimbursements, were they not or expense, really incurred?

Ms Jean M. Coon: Yes Your Honor.

It provided -- the statute provided for a lump sum per-pupil payment.

The record before this Court at that time indicated that the amounts which were paid to the schools were in fact generally less than the actual cost of rendering of services involved.

Immediately, succeeding the decision of the District Court, which had enjoined permanently, the payment of the State A which was provided by the statute and which of course have the effect of permanently preventing, the second payment for the 1971-72 school year.

The New York State legislature enacted the statute here in question which by its terms enabled the non public schools to go into the New York State Court of Claims and to sue in the Court of Claims to collect that second payment for the 71-72 school year.

At that time, this case which is before this Court today was selected as a test case to be tried in advance and determined in advance of any other cases under the statute.

The State moved to dismiss the claim in the Court of Claims on the basis that the statute was merely a resurrection of the statute which this Court had declared to be unconstitutional in 1973.

Justice William H. Rehnquist: Mrs. Coon isn't that a rather strange posture for the Attorney General to be taking both in the New York courts and here to be saying that law enacted by the New York legislature is unconstitutional?

Yet usually its my understanding, the Attorney General's job is to defend laws enacted by the legislature?

Ms Jean M. Coon: As a normal state of affairs that is true.

Justice William H. Rehnquist: But why is it different here?

Ms Jean M. Coon: It is different here because it is, well, for one thing we felt that as a matter of policy that this Court is having come down with the decision holding the underlying statute, the 1970 statute unconstitutional.

That we had an obligation to uphold the decision of this Court, but additionally it is as a matter of practice in defending the State in what, in the Court of Claims, under these enabling Acts, and these are relatively common practice by the New York State legislature to pass acts enabling certain claimants who for one reason or another were unable to bring an action originally under the Court of Claims Act.

It is a practice of our office to defend in many instances by contesting the constitutionality of the statute itself.

Unknown Speaker: You certainly know, we ask the defendant, is it not?

Ms Jean M. Coon: That is quite true, Your Honor, and I think in --

Unknown Speaker: Otherwise a legislature could pass grossly unconstitutional, pay flagrantly, patently unconstitutional legislation awarding money to people they are just coming to the Court of Claims and get it and there would be nobody to defend the --

Ms Jean M. Coon: That is quite true, Your Honor and --

Unknown Speaker: And the legislation is unconstitutional.

Ms Jean M. Coon: And one of basic arguments that we frequently make and which was one of the arguments made in this case itself as a state constitutional argument is that many cases we challenge the statutes on the basis that they constitute unconstitutional gift to State funds.

Justice Thurgood Marshall: It does not follow do you have to conspire with it?

Ms Jean M. Coon: No, in all those cases when they are dealing with the State constitutional questions.

In this case we were dealing with a federal constitutional question and that was the basis upon which the Court of Claims and the State courts all decide, that was on the basis federal constitutional question.

The State Court of Claims held -- agreed with the State's position, granted the motion to dismiss on the basis that the statute was indeed a reenactment even if only for one payment, the statute held unconstitutional by this Court in 1973, and in so doing the Court distinguished this Court's decision in the second Lemon case.

Lemon v. Kurtzman, which permitted the final payment under the Pennsylvania statute which had been declared unconstitutional in the first Lemon case.

This case however, in the posture which is presented to this Court has one additional issue which arises out of the New York Court of Appeals' decision and I believe it is that decision which brings really the first argument which must be presented to this Court because in scheduling argument in this case, the Court delayed the decision on jurisdiction, pending the oral argument and we have recognized that what we are appealing from here is technically an order of the Court of Appeals which did remand this case to the Court of Claims for an actual trial on the amount of damages.

We submitted to this Court, and in fact the Appellees here agree that the decision of this Court, that the Court of Appeals decision was final for the purposes of jurisdiction in this Court because it did finally determine the question of constitutionality under the federal constitution of the 1972 Enabling Act.

But additionally we submit to the Court that the Court of Appeals in its decision, interjected a new element which we consider to be a new element of unconstitutionality into this decision.

The Court of Appeals in remanding to the Court of Claims, adopted the minority decision in the State Appellate Division, and in that decision the opinion in that, over the minority in that Court, said that the issue of how the funds were actually used by the schools, and whether or not they were used for -- further the religious purpose of the schools, could and should be tried in each claim in the Court of Claims.

Now, we should note that under the New York State Constitution, the power to audit and determine claims against the State of New York is given to the Court of Claims.

Consequently we feel that the decision of the Court of Appeals interjected into this statute an element which was not present when the underlying 1970 statutes before this Court and that is a question of excessive entanglement between church and state because the auditing function which would be performed by the Court of Claims in the trial of these cases, is significantly similar to the auditing requirement which this Court found to be unconstitutional in the first Lemon decision.

Justice William H. Rehnquist: But, then in Lemon it was a recurring audit, was it not and here I take it just be a one shot deal?

Ms Jean M. Coon: It was a recurring audit Your Honor, but I think that the distinction, it raises a question of whether or not something can be a little bit unconstitutional, it was the audit for the function.

Justice William H. Rehnquist: Well, now that is not a very satisfactory answer, I mean, all sorts of questions up here, turn on matters of decree and distinctions of the audit, don't they?

Ms Jean M. Coon: It may be Your Honor, but it seems to me that in this type of a situation that if the New York State legislature were to be able to enact a statute similar to this then this could be done anytime a statute is found to be on -- similar statute to be found unconstitutional.

Chief Justice Warren E. Burger: Well, Mrs. Coon in Lemon v. Kurtzman I have thought that the entanglement concept was regarded by the Court as very dubious and was contributed to unconstitutionality because it was a continuing relationship, the continuing entanglement so that it is not the matter of being a little unconstitutional, or wholly unconstitutional when you have one audit as against continuing audit over a long period of time.

It is a question of whether one audit creates entanglement, is it not?

Ms Jean M. Coon: Yes,it is Your Honor, and I think that here we have a situation where the entanglement if any exists, it exists for the entire duration of the statute and that may be the analogy there that this is the statute.

Chief Justice Warren E. Burger: Well, if it is just to finish recruitment for the particular fiscal or bunch at year, then it is not is it continuing, is it?

Ms Jean M. Coon: No, Your Honor, but the original statute, the 1970 statute simply provided a lump sum per-pupil payment.

At the time of this statute which is before the Court now was enacted, it was the understanding, I believe of all the parties that including the legislature, that what the legislature was doing, was providing for the Court of Claims to make an award which would be a mathematical computation of the same lump sum amount. But what the Court of Appeals has done in this case, is to provide for an audit by the Court of Claims, an audit which will go into the question of how all of this money was used in the school year to go into the question really of an analysis of the tests, which were given by the teachers involved here and to determine whether or not these services because what would be involved here is the compensation for the teacher-prepared test, whether or not these tests, further the religious function of the schools and we would submit to the Court that, that type of a situation even on a one shot deal would create an excessive entanglement situation between the courts of New York State and the non public schools.

Justice John Paul Stevens: Mrs. Coons, may I ask you a question about what is going to happen if the goes back?

On this $45 per-pupil, I guess at least in the higher grades, exactly what is to be determined?

Supposing they find out that, that amount of money was actually spent, but $5 of it could be said to have been contributed to some religious purpose.

Would they get $40 or nothing?

Ms Jean M. Coon: I would assume that the under the Court of Appeals' decision they would get the $40 with the Court of Appeals' decision.

Justice John Paul Stevens: Supposing they found that they did not actually spend $45 on the test, they only spent $40, but there was none of that r for religious purposes would they get the $45 then or just $40?

Ms Jean M. Coon: They would get $45 under the statute.

It is for testing and record keeping purposes and the record before this Court under the 1973 was that the lump sum per-pupil allotment actually came out to less than the actual cost performing all other services.

Justice John Paul Stevens: Well, if that is true then there is going to be some excess, would you argue that that excess necessarily contributed to the religious mission?

Ms Jean M. Coon: Well, the excess would be, it may be Your Honor that, on going back and trying this.

This case could be tried in a posture in which big schools could put in their claims for the clearly constitutional, what we would consider to be the fairly constitutional aspects that is the direct attendance, medical record keeping, the administration of the state-mandated test.

The state regions and various other state-prepared and mandated test and that in fact, none of the amount, the per-pupil amount might necessarily relate to the teacher-prepared tests at all.

In other words, the schools, if they put in their claim for their cost, could actually -- might in some cases come up with cost which would be acknowledged to be constitutional expenditures without reaching the question of the teacher-prepared test and others they would not, and that there would be when you get into this question of the teacher-prepared test, they reach the question of the cost of teacher-prepared test that you would run into this question of entanglement.

Justice John Paul Stevens: Does the record now tell us exactly what they are going to ask for?

Ms Jean M. Coon: No, Your Honor because the claims were filed based on the mathematical computation.

Justice John Paul Stevens: Is that filed for the $45 per-pupil theory?

Ms Jean M. Coon: $45 per-pupil, $27 per-pupil on elementary grades.

Justice John Paul Stevens: And then the purpose of the audit is well, tell me, , I am still concerned about the finality questions?

Ms Jean M. Coon: The question, the finality , t seems to us arises in basic way, in the fact that the State Court of Appeals decision finally determined the question of constitutionality of this statute under the federal constitution.

There is nothing that in going back into the Court of Claims.

There is nothing that the Court of Claims in a further decision in this case or in any of the state appellate courts in a further decision of this case could say which would affect the Court of Appeals decision as to the constitutionality of the underlying Enabling Act.

Justice William H. Rehnquist: But the exact effect of the Court of Appeals' decision, I gather from your response to Justice Steven's questions on the constitutional issue, Is not going to be clear until the Court of Claims interprets that and decides whether so much will go or the whole thing will go?

Ms Jean M. Coon: That would be, I think it seems to me Your Honor is a part of the mathematical computation.

If this Court were to say that the Court of Appeals was correct in saying you go back and try these issues and if this does not constitute, as we feel it does in excessive entanglement, then it is simply a question of applying, of trying the issue of what each school was doing with this money?

It does not affect the underlying question of whether or not the State could constitutionally in effect resurrect 1970 statute by an Enabling Act.

Chief Justice Warren E. Burger: I Go back to my --

Unknown Speaker: That all long fact that the invalidation at the Trial Court level was during the school year rather than after?

Ms Jean M. Coon: Well, I think that the position of the Appellees here is better in effect because of the fact that the invalidation came during the school year.

I would submit that --

Unknown Speaker: It is better than if it had come after the school year?

Ms Jean M. Coon: Come after and I would submit to Your Honor that actually it seems to me that it does not make any difference.

Unknown Speaker: And we think it is just the other way around?

Ms Jean M. Coon: Well, having come during a school year, they can raise the argument that the school budget for example, was prepared based upon the expectation of receipt of these funds, if it came as after the close of the school year and in prior to the commencement of the next school year, you would not have that argument.

We submit to the Court that that is one of the basic differences really between this case and the second lemon case.

Chief Justice Warren E. Burger: You are assuming it?

Unknown Speaker: But you are not following that all.

Ms Jean M. Coon: Well, may be if I try to distinguish the second Lemon case, I can show you why I am saying this. When the first, when Lemon I came to this Court, it came as an appeal from a decision of the Pennsylvania District Court, holding constitutional.

The Pennsylvania statute which provided for the purchase of secular educational services from the non public schools.

One of the basic arguments in support of enabling the schools in Pennsylvania to collect their final payment, the final year's payment under the Pennsylvania statute, was that the schools had in fact budgeted their funds in reliance upon the receipt of a --

Unknown Speaker: Precisely and here they do not have when its invalidated during the year that element of reliance expires, is it not?

Ms Jean M. Coon: Well, they presumably budgeted their school expenses for the entire year, in reliance on the fact that they would be collecting this money.

Chief Justice Warren E. Burger: They were depending on getting it until the end of that school year.

Were they not?

Ms Jean M. Coon: Yes, they were.

Chief Justice Warren E. Burger: For budget purposes.

Ms Jean M. Coon: They were depending on getting both payments and these payments are not made semi annually, there was, one is made in January and one in --

Unknown Speaker: How can you say that when it is invalidated in April?

Ms Jean M. Coon: Well, because the school they have budgeted their expenses for the whole school year.

Unknown Speaker: Well, they budgeted, but obviously the budget has been thrown out of line?

Ms Jean M. Coon: Yes, that is what the problem is? The budget has been thrown out of line and this is why I say that --

Unknown Speaker: I am just trying to build up an argument for you but you do not want to to accept it?

Ms Jean M. Coon: No, this is why I say that the Appellees' position here, I feel is stronger with this having been invalidated during the school year than if it were after the close, but we would say to the Court, that in this case, that does it really follow because this statute, the 1970 statute was under attack from the time it became effective that unlike the Pennsylvania statute where they had a District Court decision prior to it reaching this Court, but they had a District Court decision saying the statute was unconstitutional.

The constitutionality of this statute was always at issue and was always in a situation in which the schools could not really rely upon the continued implementation of the statute, that at any time, a preliminary injunction could be requested that at any time a District Court decision could have held it unconstitutional.

The fact that they collected State aid under the statute for a year-and-a-half is not something upon which they could rely, because the statute always was under attack from the time it became effective, and there was always that element of uncertainty.

We would say to the Court that there was in Pennsylvania statute situation, an element if not of certainty, an element at least of some reassurance, and the fact that the District Court had held the statute constitutional.

Justice Lewis F. Powell: May I ask you a question about your statement that the statute always was under attack, my recollection is a suit was brought a day before the statute became effective, said July 01, and no action was taken, no request was made for preliminary injunction until April 11, nearly two years later?

Ms Jean M. Coon: That's quite true, Your Honor. The statute, the action was commenced the day before the statute became effective, but as I said the action was commenced, it is not a situation in which the statute was allowed to go into effect and continue in effect for a year or so, before it was started.

The case was started and it was under -- there were movements of put on in terms of interrogatories that were submitted, and so forth that the case was underway of the entire time of the statute was in effect and we say that this --

Justice Lewis F. Powell: But not even a request for preliminary stand, was it?

Ms Jean M. Coon: No, Your Honor it was not.

This we think is one other reasons why we feel there is a distinction between this Court's decision in the Lemon case and in this, and the other one really is that the -- in the Lemon situation what was held unconstitutional there was not the services, not the payment for the services that were being, were compensated for by the non public to the non public schools, but the fact that there was this excessive and continuing auditing process which the Court considered to be an excessive entanglement.

In Lemon II, --

Chief Justice Warren E. Burger: No, but that excessive entanglement stopped with our just holding, did it not?

Ms Jean M. Coon: Yes, it did Your Honor, that is why I am saying, I am --

Chief Justice Warren E. Burger: So there would be no future in New York, there will be no future continuing entanglement?

Ms Jean M. Coon: No, that is true Your Honor, but I think I am getting beyond the question of finality.

Now, what I am trying to do is distinguish the two statutes, the type of payment.

This Court in Lemon II said that in effect that the payment, -- final payment to the non public schools in Pennsylvania would be permitted in part, because the unconstitutional aspect of that statute had already occurred. In other words, the audit had already occurred.

It was just then the question of paying out the amount in question and that there was in the making that final payment, there would be no unconstitutional feature involved.

On the contrary in this case, we have a situation where what was held unconstitutional by this Court, was not an auditing function or continuing function, but the fact that among the tests that would be compensated for, under the Act were those which were teacher-prepared and which this Court held to be an integral part of the teaching process of the non public schools and that it was the compensation for those teacher-prepared tests, which the Court found to be unconstitutional and we submit to the Court that in this Enabling Act what the legislature of the State of New York has done, has been to say to these schools, you may collect even if only for this one final payment, compensation for services which the United States Supreme Court has held to be unconstitutional in terms of compensation by the State, and we submit to the Court that this is really, we submit a significant distinguishing feature between the permission of the final payment in Lemon II, and in the Pennsylvania statute, and the provision for payment here, and we submit to the Court that this makes, this payment here unconstitutional and under the federal constitution and that constitutes a resurrection even if only for one time of the statute which this Court held unconstitutional in 1973.

Chief Justice Warren E. Burger: Very well, thank you, Mrs. Coon.

Mr. Nolan.

Argument of Richard E. Nolan

Mr. Richard E. Nolan: Mr. Chief Justice and may it please the Court.

My name is Richard Nolan.

I represent Cathedral Academy.

The issue here is whether this case is controlled by the rationale of this Court's decision in Lemon II, where the Court balanced in a very flexible way and a very equitable way, constitutional matters as opposed to reliance interests.

In this case, the courts below, I am referring to the Court of Claims, I am referring to both the majority and dissenting opinions in the appellate division as adopted by the Court of Appeals found that these schools had relied in terms of planning their budgets which had to be done before the school year begins, on the way so that Cathedral Academy would expect to receive probably about $14,000 per year in two annual installments, and they would act on the basis of their expectation in receipt of that money.

Justice John Paul Stevens: Mr. Nolan, write at that point, because I want to be sure you cleared for me the the reliance issue.

Is it not correct that the services and the testing and all that for which the schools are seeking reimbursement were required by state law?

Mr. Richard E. Nolan: I believe that so, I know this helped there.

Schools have to maintain attendance records, they have to maintain health records, they have to provide --

Justice John Paul Stevens: But then would they had not had to perform this service entirely apart from any reliance on other funds?

Mr. Richard E. Nolan: They would have had to perform the services, but they would not have expected any reimbursement, but the Statute Mandated Services Act did, was to give that at the schools an expectation of reimbursement of certain moneys which they could use for their general purposes.

It is quite true that services though --

Justice John Paul Stevens: So the real harm to the school is not having all these funds available as replacement for funds, they will be used for general purposes?

Mr. Richard E. Nolan: Well, I think the funds that would have been made available really would have gone into the general purposes of the school, would be an additional money.

Justice John Paul Stevens: So it is really the same case as if these funds were just the general subsidy to that extent?

Mr. Richard E. Nolan: Well, I think that was raised in the Levitt case, but I think as to that, this Court has never said that simply because a payment is made to a school which enables it to free up all the funds, but that is a violation of the Establishment Clause.

This argument was made by the State in its brief and I think we have answered it on that basis with referring to that Robert(ph)case.

Justice John Paul Stevens: That the whole concept of reliance here is really inability to free up funds for general purposes?

Mr. Richard E. Nolan: That is right Your Honor.

In the Mandated Services Act case, the Levitt case, I think the chronology is fairly significant because the statute was attacked almost immediately, like I think the lawsuits filed either contemporaneously with the statute, or very shortly thereafter?

Nothing was done in that case by the plaintiffs, except to move for the convening of the three judge District Court, that motion was opposed by the State, opposed by the intervenors, but was granted by the District Court, that meant that in the District Court's judgment, there was a substantial federal constitutional question which required the convening of a three judge District Court under the statutes then in effect.

Then, the case remain acquired for at least another year until 1972 and I think the reason for that was because this Court had before the Lemon I case, and the Tilton case and putting aside the general question as to the precision with which people can predict the outcome of First Amendment Church-State cases.

There was a great deal of question in everybody's mind as to what effect the Lemon and Tilton cases would have on the Mandated Services Act.

It was not until 1972, in March of 1972, that the three judge court called for briefs.

By that time --

Unknown Speaker: In the meantime there was never an application for injunctive --

Mr. Richard E. Nolan: There was never an application for a preliminary injunction or a temporary restraining order Your Honor.

The case simply remained at rest.

I believe there came a point where the plaintiffs wrote to Chief Judge Kaufman and asked him to expedite the matter Chief Judge Kaufman pointed the three judge court in March, they called for briefs, the case was argued in early April.

It was argued about three or four days before the first payments for the second semester would have been made between the period of April 15 and June 15.

The Court heard argument and entered a temporary restraining order until its decision which came down in the later part of April.

That decision was not unanimous, it was a very very vigorous dissent by Judge Palmieri.

Then the case came up here, but in the meantime and before Lemon II had been decided, the New York legislature recognizing the problems which the District Court's decision, or the timing of the District Court's decision had coursed to these schools, passed chapter 996.

Now, the case came up here and this Court well knows, the Court took probable jurisdiction.

Obviously there had to be something to argue about, the case was then fully argued and briefed and it was decided that the Mandated Services Act was unconstitutional with one justice dissenting, Mr. Justice White.

So I think to say as Ms. Coon now does that the schools could not have reasonably relied on receipt of this money, at least up until the time of a final determination as to constitutionality, I must say, I do not think that is correct and certainly does not comport with this Court's decision in Lemon II which recognized the very very shadowing line of demarcation between what is valid and what is invalid in the Church-State cases and which also recognized the fact that there is a a presumption of constitutionality under which state officials, private parties are entitled to act, and entitled to rely.

Justice William H. Rehnquist: Mr. Nolan, when did our decision in Levitt come down?

Mr. Richard E. Nolan: The decision came down in June 1973.

Justice William H. Rehnquist: And money is paid over what period of time are to be reimbursed under the Act here in question?

Mr. Richard E. Nolan: Money which would have been paid for the second half of the 1971-72 school year.

In other words, those would have been paid had the District Court's decision not come down when it did, those moneys would have been paid between April 15 and June 15 of 1972.

The District Court's temporary restraining order followed by its 2:1 decision in late of April 1972, blocked the payment of those funds and it is those funds that chapter 996 is intended to address its altitude.

Unknown Speaker: What is the aggregate of that sum Mr. Nolan?

Mr. Richard E. Nolan: The aggregate of the sum I believe state has --

Unknown Speaker: Only $14,000 what is that symbolic of?

Mr. Richard E. Nolan: The aggregate of this particular claim is $7,300.

Unknown Speaker: Yes.

Mr. Richard E. Nolan: That would represent one half of the reimbursement which Cathedral Academy could have expected.

Unknown Speaker: But this is a test case I gather for all funds.

Mr. Richard E. Nolan: Yes, it is Your Honor.

The State and we have considered to be as test case --

Unknown Speaker: And 996 was involved how much?

Mr. Richard E. Nolan: 996, I think would involve a total amount of claims filed in the Court of Claims and about $11 million by I believe 2000 schools.

So that we are talking about not $14 million, but something reasonably close to it.

Now, one of the attempt to distinctions that the state makes respect to Lemon, is that in Lemon there was an audit procedure under the statute which audit procedure had been completed except the certain administrative details by the time, the case was concluded.

In this case the statute, the Mandated Services Act did not have an audit procedure, and that was one of the problems that we had with it, it provided for a lump sum payment and that is what one of the things this Court found to be defective.

In chapter 996, what the legislature has attempted to do, is to give to the Court of Claims, jurisdiction to hear claims against the State for reimbursement of mandated services.

The State claims that this is going to create an entanglement.

First of all, it is a one time reimbursement and it cannot occur again.

The statute on its face applies only to whatever portion of the second half of the 1971-72 funds are found by the Court of Claims to be reimbursable.

Secondly, we do not have here a situation such as in the ordinary entanglement situation, of the administrative officers of the State government in New York's case the State Education Department, coming into the schools and in effect, telling the schools what to do or interfering with the school's operations whatever they may be.

What we have here is a judicial proceeding in the Court of Claims, which handles all money damage cases against the State of New York.

We have a situation here where a claimant just as a construction claimant or anybody who is a contract fight with the State of New York, that will come in and will attempt to prove what it was, that what services he performed that he is entitled to recover against the State on, either on a theory of contract, or on a theory of statutory authorization or queries like contract or one.

Justice Thurgood Marshall: We will get into the question of whether or not it was religious work?

Mr. Richard E. Nolan: I believe so Your Honor, if what --

Justice Thurgood Marshall: That is a little different from the contract.

Mr. Richard E. Nolan: I think that to what -- that is yes, but I think that that can be handled under the procedures that have been set up as indicated in the opinion of Presiding Justice Hurley here, the Appellate Division which opinion was later adopted as a majority opinion by the Court of Appeals.

I think so far as attendance records, health records, the costs provided in the State standardized region's examination, pupil evaluation, performance examinations and like, there should not be any problem there.

What -- where the problem arises as Mr. Justice Marshall rightly points out, is in making sure that no reimbursement will occur for examinations in or examinations which tend to propagate religion.

Presiding Justice Hurley stated; however, it is readily apparent that it was never the intent of the legislature that any of its funds would have been allowed for the furtherance of religious purposes.

In this regard, the audit by the Court of Claims must serve the same purpose as the final post audit which was referred to in Lemon II.

Accordingly, the burden will be on the claimant to prove that the items of its claim are in fact solely for mandated services, and the burden will be upon the Court of Claims to make appropriate findings in regard thereto.

So I think the Court of Claims is going to have if claims are made or reimbursement of teacher-prepared examinations, we will have to take evidence as to what those examinations consisted other than satisfy itself, it can do so, or the claimants can carry their burden of proof that this was not a method of propagating religion.

I think that also --

Justice John Paul Stevens: Mr. Nolan, is it possible that in that inquiry there may be exams that follow a pattern that have been used over the years or may be used in the future?

Mr. Richard E. Nolan: I think so.

Justice John Paul Stevens: And there might be a legitimate difference of opinion as to whether a particular exam propagates religion or not?

Mr. Richard E. Nolan: I would think so Your Honor, but it seems to me that not only on the merits of a case but also on the finality point, the law of New York State now, what is this, what Presiding Justice Hurley wrote as adopted by the appellate division -- by the Court of Appeals, it seems to me that the law of New York is that no money will be reimbursed for any tests to propagate religion, so that as a matter of the State law, as a matter of New York law no payments can be made for anything that propagates religion, and the Court of Claims, or the appellate division or the Court of Appeals, it seems to me, is perfectly capable of making those determinations as matters of state law, so that we do not have, I do not think, we do not have a situation here where we have a real finality problem.

I think, finality will come within the first two tests of the Cox Broadcasting Company case and I think that the way the New York courts have handled this situation, so as to make the question of religious propagations, or reimbursement for religious propagation, matters of state law, it means that this Court need not worry about the case coming back up.

Justice John Paul Stevens: But is it not possible that that is also a federal question?

Mr. Richard E. Nolan: Yes, but I think will be decided as matters of state law because of the way that Presiding Justice Hurley and the Court of Appeals that --

Justice John Paul Stevens: But if you agree that there is a legitimate room for difference of opinion as to whether a particular test has religious propagation features, they have a large number of claims, is it not possible that the trier of fact must make a large number of determinations of the religious versus lay issue?

Mr. Richard E. Nolan: It may very well be although I would think there would be certain patterns, we are talking about examinations we are given at one particular semester.

Justice John Paul Stevens: But by a large number of schools there may not necessarily be the same exam?

Mr. Richard E. Nolan: I would think in many cases they would not be the same exam and there would be a burden on the Court of Claims.

Justice John Paul Stevens: But you do not think, this would be a excessive entanglement to be reviewing literally dozens of exams to see how many have religious overtone.

Mr. Richard E. Nolan: I would not think it is anymore difficult and the problems of the Court of Claims is going through and trying to sort out who but gets paid for wanting himself more in Albany, the claims are on the self moreover remains and require tremendous amount of time and energy by the Court of Claims.

Justice Thurgood Marshall: But it did not have anything to do with religious?

Mr. Richard E. Nolan: No, it did not, but there is no reason why not --

Justice Thurgood Marshall: There is no entanglement involved?

Mr. Richard E. Nolan: That is right Your Honor.

Justice Thurgood Marshall: But it is involved here?

Mr. Richard E. Nolan: It could be involved here. But I think the Court of --

Justice Thurgood Marshall: Is it not involved?

Mr. Richard E. Nolan: I say it is.

It is involved, but it is not excessive entanglement because it is a one time process by a court which is capable of handling this as a legal matter which does not involve any intrusion by the State Educational Department and finally it deals with matters which occurred over five years ago.

Justice John Paul Stevens: Well, what the State Education Department have to review all these exams and decide what position to take with respect to each in the litigation?

Mr. Richard E. Nolan: I believe the Attorney General's office would represent the state in proceedings in the --

Justice John Paul Stevens: Some may claim involved religion, others they would decide are not sufficiently serious that they have to check out?

Mr. Richard E. Nolan: I would think what have to be --

Justice John Paul Stevens: What is your view Mr. Nolan if in conducting the audit it is determined that only $40 per-pupil was in fact spent by a school.

Does the school get $45 or just $40?

Mr. Richard E. Nolan: I would say $40.

Justice John Paul Stevens: Does the statute contemplates kind of an actual reimbursement rather than the per-pupil?

Mr. Richard E. Nolan: The statute contemplates as I read it.

Justice John Paul Stevens: But how does that answer the reliance question if the school relied on a full $45 and they only --

Mr. Richard E. Nolan: This means perhaps the statute did not quite meet the full effect that its sponsors intended to meet, but the statute again has not been construed in that light by the New York Courts.

Justice John Paul Stevens: What if instead of they did not spend the $45 they only spend $40 and $5 of it was religious orientated exam do they only get 35 or they get nothing?

Mr. Richard E. Nolan: They would get whatever they were entitled to that was not, did not --

Justice John Paul Stevens: They get $35.

Mr. Richard E. Nolan: That did not involve reimbursement for religiously orientated examinations.

Justice Lewis F. Powell: Mr. Nolan, these are a couple of decisions for last several years, I know this is not cited in either a brief and perhaps are not relevant.

In Blue Hull I think it was in the name of one and Serbian something, he name of the other in which in effect we held I think that it is no business of courts to be deciding what is religion and what is not, do those cases have any relevance here?

Mr. Richard E. Nolan: But I think, I do not think so.

I think that is in the context of property disputes.

Property disputes as to the operation of a church I think here what we are talking about is simply a matter of fact as to what occurred five years ago in the Spring of 1972.

Justice William J. Brennan: Yeah I know, but I thought we held in those cases that if it is a question to whom this property belong and to decide that you got to decide a question of religion and courts have to stay out of it?

Mr. Richard E. Nolan: Well, I think that would involve questions as to the organizational philosophy of particular church and how its property was to be divided up in the case of a --

Justice William J. Brennan: Well, I think the Serbian case involved more than just property that involved who was the bishop and whether or not a determination whether one or the other was the bishop, was anything that lay courts could get into I thought we can not?

Mr. Richard E. Nolan: Well, I think that this situation is somewhat different because this is in effect a claim for services rendered and if a church school would have some contract with --

Justice William J. Brennan: that is claim to property.

The school --

Mr. Richard E. Nolan: Its a claim for money that the --

Justice William J. Brennan: That is property I suppose.

Mr. Richard E. Nolan: It is property in that sense, but following that rationality a church or a church school could never seek to recover damages from a state in the Court of Claims or any other court because the court would be incompetent to decide those things --

Unknown Speaker: What is that?

Mr. Richard E. Nolan: I am simply -- I do not agree with it.

I am still understanding that, that would an improper result.

Unknown Speaker: I do not agree with your statement.

I do not think that church could recover money and any of these pupils did not involve passing on religion?

Mr. Richard E. Nolan: Well, I really.

Unknown Speaker: Justice Brennan had suggested to you that this has just entangled by another name.

Mr. Richard E. Nolan: Well, I do not think its, it may be entanglement, but I do not think it is excessive entanglement.

Chief Justice Warren E. Burger: Wasn't the Serbian Orthodox case based on a whole line of cases of this Court that we, the courts have kept out of --

Mr. Richard E. Nolan: That is right.

Chief Justice Warren E. Burger: Intra paroles of churches leaving that to the law of the church.

Serbian Orthodox did not involve any conflict between the church and the State?

Mr. Richard E. Nolan: As my understanding and that follow the long line of cases in this Court and I believe also with New York courts with respect to --

Chief Justice Warren E. Burger: Do you happen to know what Lemon and Kurtzman was even cited in --?

Mr. Richard E. Nolan: I do not believe it was.

Chief Justice Warren E. Burger: I think so.

We are getting back if I may to the entanglement question?

Mr. Richard E. Nolan: I really find it very hard to see how there can be excessive entanglement here, obviously there could be entanglement, but that is not enough.

Under the decisions of this Court there has to be an unreasonable or excessive entanglement or intrusion.

In this situation, there will be determinations as to whether or not these teacher-prepared examinations could carry the propensity for the inculcation of religion, but we are not talking about anything that is going to affect the relationship between the State and the church schools now or in the future.

We are talking about accomplished fact in the Spring of 1972. What examinations were given in history, to what extent was religious matters covered by those, to what extent were they not and a determination made as to whether and to what to extent money damages are to be awarded? I do not think that has any propensity at all for moving the State into a position where it would affecting the ongoing operations of the schools or creating any sort of administrative interplay between the present operations of the schools and the State and I think that the entanglement on argument whatever its merits maybe in an ongoing program where moneys are to be made available year after, year after, year and will have to be audits, periodical audits to make sure as in Lemon that there would be no use of this money for religion, that's a totally different thing I think from the one time limited reimbursement that we are talking about here.

Justice Thurgood Marshall: Would not these one time set a precedent that question A is not secular, it is not a precedent for the future --

Mr. Richard E. Nolan: Certainly would --

Justice Thurgood Marshall: Established by the State of New York.

Mr. Richard E. Nolan: If I understand you correctly, I think it would.

Thank you very much Your Honor.

Chief Justice Warren E. Burger: Do you have anything further. Mrs. Coon.

Rebuttal of Jean M. Coon

Ms Jean M. Coon: No.

Chief Justice Warren E. Burger: Thank you, the case is submitted.