U.S. Supreme Court declines to hear Lipscomb Bond Case
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The U.S. Supreme Court announced today that it will not review a lawsuit regarding Lipscomb University's use of tax-exempt Industrial Revenue Bonds for campus construction, ending a 12-year court battle.
"On behalf of students, faculty and staff, I am very pleased with the Supreme Court's decision. It upholds our conviction that Lipscomb University enhances the educational and economic development of our community and region, which is what the bond program is designed to promote. It also upholds the idea that our Christian mission, which is the reason we are dedicated to presenting a premier academic program, should never have been a factor in the bond process at all," said Lipscomb President Steve Flatt.
The court's refusal to hear the plaintiffs' appeal upholds the 6th U.S. Circuit Court of Appeals' decision last August holding that Lipscomb's use of tax-exempt bonds was permissible under the U.S. Constitution, said Bradley A. MacLean of Stites and Harbison PLLC and Lipscomb's lead counsel in the case.
"The Supreme Court's decision not to review this case is significant. It means that the 6th Circuit's ruling in the case is final. The 6th Circuit upheld Lipscomb's position and ruled that the government cannot discriminate against a religious school in deciding whether to grant tax-free municipal bond financing for campus projects that advance the school's educational goals," MacLean said.
"The decision in this case also recognizes that Lipscomb University is one of the leading small liberal arts universities in the nation, and its presence in Nashville enhances the educational opportunities for students throughout our region," MacLean said.
In early 1991, Lipscomb University applied for, and was granted, $15 million in Industrial Development Bonds to finance construction of Beaman Library, the Student Activities Center, campus landscaping and beautification, and renovation of Crisman Memorial Library for use as an administration building. On May 31, 1991, five Davidson County residents, led by Harold Steele, and a group called Americans for Religious Liberty, filed a lawsuit asserting that the bonds constituted a direct endorsement of religion in violation of the Establishment Clause.
In October 2000, U.S. District Judge Aleta Traugher ruled that Lipscomb was ineligible for the industrial revenue bonds, holding that the institution was "pervasively sectarian" and that such aid would violate the separation of church and state, or the "Establishment Clause" of the First Amendment.
But in August 2002, the 6th Circuit reversed that ruling and granted summary judgment to Lipscomb and Metro Nashville. The court held that because the aid was "indirect" and part of a neutral program that benefited a wide range of educational and commercial entities, the religious nature of Lipscomb's mission did not matter.
"The objective observer of Metro's industrial revenue bond program, knowing the history and context of this program, would reasonably view it as one aspect of a broader undertaking to finance economic development, not as an endorsement of religious schooling in general. Metro no more endorsed Lipscomb University than it did Wal-Mart in issuing industrial revenue bonds," said U.S. District Judge Edmund Sargus Jr., in writing the 6th Circuit's majority opinion.