Federal Court of Appeals Rules DPI Violated State Law When Denying Transportation Benefits to Private School Families

WILL filed case in 2016 on behalf of Washington County independent Catholic school, parents

The News: A three-judge panel of the federal Seventh Circuit Court of Appeals issued a decision in St. Augustine v. Underly, a lawsuit first filed by the Wisconsin Institute for Law & Liberty (WILL) in 2016, that the Wisconsin Department of Public Instruction (DPI) violated state law when denying transportation benefits to families attending St. Augustine School, an independent Catholic school in Washington County. The case was remanded to U.S. District Court for a determination of damages and of whether an injunction should issue.

The Quote: WILL Deputy Counsel, Anthony LoCoco said, “The Seventh Circuit’s decision makes clear that government has no business denying students transportation aid on the basis of its own religious judgments. This is a win for private school families across Wisconsin.”

Background: Wisconsin provides transportation aid to qualifying private school students as long as there is not an overlapping attendance area between private schools that are affiliated with one another, or more specifically, affiliated with the same sponsoring group. In this case, DPI and Friess Lake School District (now part of Holy Hill Area School District) denied St. Augustine students busing rights because there is an Archdiocesan Catholic school in the attendance area.

But St. Augustine is independent and unaffiliated with the Archdiocese. In this case, the school district and DPI determined the definition of Catholic and withheld government benefits until St. Augustine agreed not to call itself “Catholic.”

In Court: WILL filed this case in state court in August of 2016. It was moved to federal court where the United States District Court for the Eastern District of Wisconsin ruled against St. Augustine in June 2017. In October 2018, a three-judge panel at the Seventh Circuit Court of Appeals affirmed the lower court ruling 2-1. In a vigorous dissent Judge Kenneth Ripple warned that the decision “raises haunting concerns about the future health of the Religion Clauses [of the First Amendment] in this circuit.” The decision was also criticized in an article in the June 2019 edition of the Harvard Law Review.

WILL sought review at the United States Supreme Court in March 2019. The Court granted certiorari, vacated the decision of the Seventh Circuit Court of Appeals, and remanded the case back to the Seventh Circuit in July 2020 in light of the 5-4 decision in Espinoza v. Montana Department of Revenue. Espinoza held that a rule barring families from using a tax-credit scholarship to attend religious schools violates the First Amendment’s Free Exercise Clause.

The Seventh Circuit Court of Appeals certified a question relating to the interpretation of Wisconsin’s transportation statutes to the Wisconsin Supreme Court in 2020. The Wisconsin Supreme Court held oral arguments in February and issued an opinion on the question on July 2, 2021.

The Seventh Circuit Court of Appeals decision, authored by Judge Diane Wood, makes clear that as a result of the Wisconsin Supreme Court’s 2021 decision, the Wisconsin Department of Public Instruction violated state law when it denied the families at St. Augustine school transportation benefits. The Court did not finally resolve constitutional questions of religious liberty in their decision.

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