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| Not how preliminary injunctions work |
By Andrew Delaney
What do you know about the Compelled Support Clause of the Vermont Constitution? As someone who’s taught the Vermont Constitution to college students, I probably shouldn’t admit that I know almost nothing about it, but there it is. We’re going to learn together today.
This decision came out about two-and-a-half years ago. It involves a historic church, the Town’s payments for repairs, and taxpayers challenging those proposed expenditures. Let’s take a look at what happened.
The Town of Cabot awarded a grant to fund repairs to the United Church of Cabot. Plaintiff taxpayers—relying on the Compelled Support Clause of the Vermont Constitution (Chapter I, Article Three for you law-review types)—challenged that grant and sought a preliminary injunction. Defendants moved to dismiss. At the preliminary injunction hearing, there was no testimony, but there were a bunch of exhibits admitted and the parties agreed to a bunch of facts.
On that record, the trial court made findings, which we will grossly oversimplify here. The Town got a HUD grant in the late ‘80s to fund a Cabot Creamery warehouse. The Town got to hold onto the leftover funds for HUD-consistent projects. So, it squirreled them away in the Community Investment Fund of Cabot (CIFC fund). Without getting too deep into the CIFC ins and outs, its basic purpose is to improve the quality of the Town. If an application makes it through the approval process, it gets proposed to the voters on Town Meeting Day and the voters decide if the project is a worthwhile use of the funds.
The United Church of Cabot (UCC) is a church, obviously. It’s also available for lots of “nonsectarian community events and gatherings, and is an important and historic building in the town.” The UCC needed a lot of repairs and it paid for some of them. But it needed more money to get the place fixed up right, so it applied for some CIFC funding to the tune of $10K. The application was approved, and the voters approved the grant.
The trial court reasoned the taxpayer plaintiffs had standing on two legs (did you really think we’d pass up an opportunity for a dad joke here?). First, despite any origination as federal funds, the CIFC funds at this point can’t now reasonably be categorized as anything other than regular municipal funds. Additionally, the taxpayers had standing because their claim was akin to an Establishment Clause claim under the U.S. Constitution. And because there’s standing for those claims under federal law, the Vermont counterpart—the Compelled Support Clause—gives standing under Vermont law.
The trial court went through the preliminary injunction test and granted the injunction. If you’re not familiar with the test, the court is supposed to, in general, consider the movants’ likelihood of success, whether they’ll suffer irreparable injury in the absence of a preliminary injunction, and the potential for injury to the public interest or third parties. On the first prong, the trial court reasoned the breadth of the voters’ authorization was too large (and there’s a SCOV case to support that). On the irreparable harm front, the trial court reasoned that the plaintiffs would suffer “an irreparable affront to their values arising from the unconstitutional use of government dollars by the UCC during pendency of the action,” even if the UCC ultimately had to pay the grant back. Finally, the trial court reasoned that “injunctions protecting freedoms guaranteed by the Declaration of Rights protect the public interest generally, in addition to plaintiffs’ own interests.”
The trial court granted interlocutory appeal of its ruling. What this could be likened to is your dad saying, “Yeah, kids. I don’t know if I’ve got it right. I mean I think I do, but maybe you’d better go ask your mom.” The Town makes a number of arguments on appeal. It argues that the trial court screwed up standing because the funds originated as federal funds and have been kept separate. It argues this case lacks the required nexus between the taxpayers’ status and the alleged constitutional violation. On the preliminary injunction front, the Town argues that the trial court got the merits all wrong because it failed to “adequately account for the legal restrictions on the use of the grant funds in concluding that the grant ran afoul of the Compelled Support Clause.” The Town also figures the trial court’s irreparable-harm finding is wrong, especially if the UCC has to pay the money back if plaintiffs win.
SCOV first looks at standing. It’s a purely legal question and the trial court gets no deference. For some reason, this makes me think of the trial court quipping Rodney Dangerfield’s most famous line. SCOV concludes plaintiffs got standing going for them. See, municipal taxpayer standing under Vermont law encompasses claims that municipal assets have been improperly wasted—like the claim here. And that’s consistent with SCOTUS’s interpretation of municipal standing.
SCOV isn’t concerned with the federal origins of the funds. At this point, the money pretty much belongs to the Town. In fact, the ’92 closeout agreement between HUD and the Town recognizes that. There’s virtually no oversight. The authorized uses are very broad. As a result, there’re basically no federal restrictions on the funds.
SCOV reasons: “Under these circumstances, the fact that the funds originated from the federal treasury does not undermine the conclusion that they are municipal assets for the purpose of municipal taxpayer standing.” And so, to make a long story short, plaintiffs have standing.
Their right to a preliminary injunction is different. SCOV reasons that though the trial court had the right standard, its analysis was flawed. SCOV opines that the trial court “overestimated the plaintiffs’ likelihood of success on the merits, and erred in concluding that plaintiffs would suffer irreparable injury in the absence of an injunction.”
A preliminary injunction is a big deal. We call it an “extraordinary remedy.” The trial courts aren’t supposed to hand them out like Pez candy. As alluded to above, there are four factors that go into the decision whether or not to grant one. Those four factors are: “(1) the threat of irreparable harm to the movant; (2) the potential harm to the other parties; (3) the likelihood of success on the merits; and (4) the public interest.” If you’re a bit of a nerd like myself, it might interest you to know that our longstanding factors for a preliminary injunction in Vermont come not from a case actually having anything to do with such animal, but from footnote number two in a juvenile case where SCOV notes that the standard for a stay of a transfer order involves considering the same factors a court should consider for a preliminary injunction. Ah, the power of footnotes . . . .
Anywho, the trial court gets some deference on factual findings and no deference on the law here.
SCOV begins with the likelihood-of-success-on-the-merits factor. SCOV reasons that given the “Compelled Support Clause of Chapter I, Article Three of the Vermont Constitution and our caselaw thereunder, limitations arising from the Free Exercise Clause of the First Amendment to the U.S. Constitution, and the record in this case,” the plaintiffs’ path to success on the merits in this case is a tough one.
Now, the Vermont Constitution does protect against compelled support for religion. It specifically provides “no person ought to, or of right can be compelled to attend any religious worship, or erect or support any place of worship, or maintain any minister, contrary to the dictates of conscience.” SCOV reasons that the Compelled Support Clause’s focus is on the support for “worship” itself. In other words, it’s not that funds can’t ever be used on a church or something like that—it’s whether the funds go directly to support “worship” itself.
SCOV notes that the Free Exercise Clause presents a problem in this case—a proverbial double-edged sword. While public support of religious institutions can implicate the clause, denial of secular benefits by virtue of religious affiliation itself also can run afoul of the clause.
SCOV notes that the record isn’t fully developed here, but what it does show is that the repair funding was a small portion of the needed funds and that the church—while a place of worship—also fills other nonsectarian roles in the community, and is an important and historic building in the Town. Additionally, the scope of use of the funds is narrow, and they can only be used for the purposes approved by the voters.
So, given all these considerations, SCOV reasons that “plaintiffs’ path to success on the merits is narrow and challenging.” The critical question is whether the funds will “support worship,” and the mere fact that a church is the ultimate recipient is not determinative. In fact, if the Town were to deny any funding solely on the basis that the church is a religious institution (when secular organizations would face no such restriction) that could be problematic.
SCOV does not see a clear path for plaintiffs on the Compelled Support Clause path either. The funds are available to all kinds of community groups and town committees, with no reference to religious affiliation. The criteria for awarding a grant has nothing to do with religious worship. “The grants are designed to, among other things, enhance the quality of life and the character of the Town, promote commercial development consistent with the scale and character of the community, promote education, and improve community infrastructure, facilities, and services.”
Sure, there’s a chance that plaintiffs will be able to establish that the award of the grant monies in this case crosses a line that ought not be crossed, but it’s not clear or even likely that line has been crossed.
And so, SCOV concludes “on the basis of the current record that the plaintiffs’ likelihood of success on the merits weighs against the issuance of a preliminary injunction.”
Even though that probably takes care of the preliminary injunction appeal, SCOV has something to add on the irreparable-injury-to-the-plaintiffs front. SCOV opines that plaintiffs would not suffer an irreparable injury in absence of a preliminary injunction.
The basic idea (or “gravamen” if you really want to sound like a lawyer) of plaintiff’s complaint is that municipal funds have been misappropriated for unconstitutional purposes. And if the funds get paid back, then that’s a fine remedy. The claims in this case are narrow, and if the plaintiffs’ win, the UCC will have to pay back the money.
Generally, a preliminary injunction should be denied if money damages will take care of the harm. Here, there’s no evidence that the UCC couldn’t pay back the money if it came to that.
SCOV notes that while a constitutional violation can be enough of an irreparable harm per se to support a preliminary injunction, that’s when it’s a “deprivation of liberty or constitutional freedom that cannot be ‘undone’ through the payment of money.” That’s not the case here, and so the principle—that constitutional violations are irreparable harm per se—doesn’t apply “in this narrow class of cases in which the plaintiffs’ injury consists of an allocation of public funds that can be repaid.” SCOV notes that it’s not a coat of fresh paint on the church that offends the plaintiffs’ conscience; it’s that public monies were used to pay for the paint that does the trick. That harm can be “undone” with cash.
And so, SCOV affirms the trial court’s denial of the Town’s motion to dismiss and vacates the preliminary injunction. And back to the trial court it goes for a determination on the merits.
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