ALLIANCE DEFENDING

FREEDOM fDA Mil H fOR JUSTIC~

April 5, 2013

Members of the California Legislature (via email)

State Capitol

Sacramento, California 95814

Re: Legal and Public Policy Concerns with SB 323

Dear Ladies and Gentlemen:

We, Alliance Defending Freedom and the California attorneys listed below, ru:c writing to

alert the members of this august body of serious legal and public policy concerns with SB 323. The bill is designed, primarily, to punish the Boy Scouts of America ("BSA") by stripping it of its ta.:~t­

exempt starus and of its exemption from California's sales and use taxes because it exercises its First

Amendment associational right to require its members and leaders to affirm its core beliefs and

values embodied in tl1e Scout Oath. But, as discussed below, the bill has wide-ranging, immediate,

and deleterious implications for other youth organizations as well, including lTl!lny religious

organizations. If passed, the bill will force not just BSA, but likely many religious organizations in

the State to choose between following fucir core values and beliefs and losing their t.'\X exemptions

or abandoning their beliefs to comply with the law. As discussed below, California cannot force

such an unconstitutional choice on these private associations. In addition to jeopardizing the First

Amendment rights of numerous nonprofit organizations, tl1e bill also has severe negative public

policy impliC!ltions, discussed in greater detail below.

By way of introduction, Alliance Defending Freedom is an alliance-building legal ministry

that advocates for the right of people to freely live out their faitl1. Alliance Defending Freedom

frequently assists non-profit organizations and associations in understanding their First Amendment

rights in regards to freedom of speech, religion, and association. We have participated in many of

the recent court decisions governing the First Amendment rights of organizations, including

Hosan11a-Tabor Evaugelical Lutheran Church & School v. E.E.O.C., 132 S. Ct. 694 (2012), and B'!)' Sco111s of America 11. Dale, 530 U.S. 640 (2000).

SB 323's Wide-Ranging and Ill-Advised Effects

Comment:uy about SB 323 has focused almost exclusively on its impact on BSA, but the

fact is the bill will also have a devastating impact on lTl!lny other nonprofit youth organizations in the

State.

15 10U N 90th Stree l Sco ll sdale. AZ 85260 Phone 800 635 5233 AlllanceOeleoo i ngFreedom erg

JB 323 Cot;ers BSA. Youth J.porls Ofl.alli~ations. qnd Mmty Religiolfs Ofl.atrizytimts

SB 323 is very broad in scope. Under the bill, ta..'C-excmpt status will be stripped from any

"organization organized and operated exclusively as a public charity youth organization that

discriminates on the basis of gender identity, race, sexual orientation, nationality, religion, or

religious affiliation." The bill states that "'public charity youth organization' includes, but is not

limited to, those organizations listed in" section 6361(b)(3) of California's Revenue and Taxation

Code. Those organizations include: "Little League, Bobby Sox, Boy Scouts, Cub Scouts, Girl Scouts, Campfire, Inc., Young Men's Christian Association, Young Women's Christian Association, Future Farmers of America, Future Homemakers of America, 4-H Clubs, Distributive Education

Clubs of America, Future Business Leaders of America, Vocational Industrial Clubs of America, Collegiate Young Farmers, Boys' Clubs, Girls' Clubs, Special Olympics, Inc., American Youth

Soccer Organization, California Youth Soccer Association, North, California Youth Soccer

Association, Soud1, and l'op Warner football." Cal. Rev. & Ta..'C. Code§ 6361(b)(3).

In addition to the groups listed in section 6361(b)(3), many more nonprofit organizations will qualify under the bill's broad definition of "public charity youth organization," and thus will lose

d1eir tax exempt status if they recognize distinctions based on any of d1e characteristics listed in the bill. Among od1ers, many venerable and long-st:tncling religious youth ministries and several

religious-based youth sports associations will also likely fall under the bill.

Thus, if enacted, SB 323 will impact far more nonprofit youth organizations than just BSA.

Its broad provisions sweep within its ambit BSA, numerous youth recreation and sports organizations, many religious ministries, and untold others, and threatens the tax exempt status of

each.

S.B 323 If/ill Stn'p Tax Exen~ptionsfrom OJLY Covmd 0'l,ani~ation that Recog11i~es Disti11ctio11s 011 the Basis of Religion. Religio11.r Affiliation. Gwder I dmti(J. or Sexual OrietrtatiOJt

The purpose of SB 323 is to punish nonprofit youd1 organizations that recognize distinctions on d1e basis of, among other things, religion, religious afflli-tcion, gender identity, or

sexual orientation, by stripping d1em of their tax exempt st.'ltus and d1eir exemption from d1e State's

sales and usc taxes. If passed, the bill will have devastating impacts on many organizations, effectively requiring them to choose between complying with d1e law and abandoning their missions

and values, or defying the law and suffering the severe penalty of losing d1ci.r tax exemptions.

Consider, for example, SB 323's likely impact on the religious youth organizations noted

above. Such organizations exist to inculcate the organizations' religious beliefs in the youth they serve. These organizations typically require their leaders, teachers, and others responsible for

carrying out d1eir religious missions to sha.re d1e organizations' religious beliefs. SB 323, which bans

discrimination based on "religion" and "religious affiliation," and which contains no exemption

from d1csc bans for religious organizations, would strip religious youth organizations of d1cir tax­exempt status if they continued to select leaders and other persons responsible for carrying out their

missions based on a shared set of religious beliefs.

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Like SB 323's ban on religious discrimination, its ban on sexual orientation discrimination,

which is designed to punish BSA over its membership and leadership policy, will also severely and

negatively impact religious organi2ations. Most religious organi2ations, undoubtedly including many

covered by SB 323, require their leaders and members to express and conduct themselves in a

manne.r that is consistent with their religious beliefs regarding seJ."Ual conduct. Under these types of

policies, individuals who approve of or engage in conduct that contradicts a group's religious

teaching regarding sexual morality may be denied membership or leadership positions. Such policies

likely conflict with SB 323. Thus, if passed, the bill will require religious organi2ations to choose

between complying with the law and abandoning their religious convictions, or defying the law and

losing their tax exemptions.

Religious organizations that select members and leaders who share their religious convictions

to maintain a coherent tcligious identity and message are not engaging in invidious discrimination.

Rather, they arc engaging in d1e most basic and fundamental exct:cisc of religious freedom

guaranteed by the First Amendment of the United States Constitution. See Hosmma-Tabor Evangelical Lttheran ChHrch aud Sch. v. Equal Emp't Opportrmi!J Comm'n, 132 S. Ct 694, 703, 708-09 (2012) (recogni2ing right of religious organizations to select those who convey d1cir message and carry out

their mission without government.'tl interference). See also Hsu By & Through Hm v. Ros/yn Uuion Free Sch. Dist. No.3, 85 F.3d 839, 869 (2d Cir. 1996) (there is "nothing invidious" about a religious group selecting coreligionists as leaders and members because such selectivity is "vital to the group's

religious mission and the ability of the group to define itself on the basis of shared faith"). Yet there

is a significant dange.r that SB 323, if enacted, will endanger these fundamental First Amendment

rights.

SB 323 also requires that nonprofit youth organizations open their sex-segregated programs

to youth of the opposite sex. It does so by prohibiting discriminntion based on "gender identity."

Gender identity, unlike sex, is determined by a person's subjective conception of oneself as male or

female, regardless of their biological sex. The gender identity concept allows people to self­

determine whether they will identify as male or female. And, under SB 323, nonprofit youth

organizations will have to comply with and affirm a person's self-determined sex, regardless of his or

her biological sex, or lose their tax exemptions.

Consider the following examples of how SB 323's prohibition on gender identity

discrimination will impact nonprofit youth organizations:

• Organizations will have to allow persons to access sex-segregated programs and activities

in accordance '.vith the sex they choose.

• Organi2ations that own or operate camp grounds, lodging facilities, or similar facilities

will have to allow persons to access sex-segregated bathrooms, showers, locket-rooms,

and lodging at those facilities in accordance with the sex they choose.

• Socce.r, baseball, football, and od1er youth sports leagues will have to allow youth to

participate in sex-segregated sports in accordance wid1 the sex they choose.

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These very real scenarios highlight two practical problems with SB 323. First, it disregards

the rights, interests, and dignity of the youth who are e>tposed to the individuals that profess a sex

contrary to biological reality. This includes (1) a biological male entering a girls' restroom, shower,

or locker room when he professes a female identity, (2) a biological female participating on a boys'

soccer or football team when she professes a male identity, (3) a biological male participating on a

girls' basketball team when he professes a female identity, and (4) a biological male residing in a

female-residence facility when he professes a female identity. SB 323, in short, tosses aside the

rights, interests, and dignity of all these individuals.

Second, Sll 323 would expose those nonprofit youth organizations to unnecessary liability.

For instance, organizations complying with the bill would allow tn.'tles to access girls' rcstrooms,

showers, and residence facilities based solely on their self-professions that they are female. And

since the bill applies solely to organizations serving youth, it would immediately place young girls in

humiliating, embarrassing, and potentially dangerous situations. These girls and their parents (and

any other individuals whose rights arc violated should the bill become law) could pursue legal action

against the organizations that comply with SB 323 for violating their rights to privacy, the duty of

care they owe to their patrons, and other legal rights and duties.

If Passed, SB 323 Will Violate the Constitutional Rights of BSA and Other Nonprofit Organizations

If enacted, SB 323 will violate the fundamental constitutional rights of BSA and many other

nonprofit organizations in various ways. Its primary vice is that it punishes private organiz.'ttions for

exercising their First Amendment associ.'ttional rights. For example, BSA has a constitutional righ t,

as do all other expressive associations, to adopt membership and leadership policies that are

consistent with its mission and values. As the United States Supreme Court has said, "Freedom of

association would prove an empty guarantee if associations could not limit control over their decisions to those who share the interests and persuasions that underlie the association's being."

Democratic Party v. Ll?'iscollsill ex reL La Follette, 450 U.S. 107, 122 n.22 (1 981). And the Supreme Court

has also held that the First Amendment protects BSA's policy requiring members and leaders to comply with the Scout Oath and the values BSA seeks to instill in young men. Bqy Sco111s of America v. Dale, 530 U.S. 640, 659 (2000).

Many types of laws can violate a group's associational rights, including those that do "not

direcdy interfere with an organization's composition," like one d1at "impose[s] penalties or

withhold[s] benefits based on membership in a disfavored group." Rumsfeld v. F.A.I.R l11c., 547 U.S.

4 7, 69 (2006). SB 323 is precisely such a law. BSA is politically unpopular because of the stand it

has taken to defend its values-based membership policy. And SB 323's primary purpose is to

penalize USA based on its constitutionally-protected membership policy and the values that underlie

it. This type of targeted punishment of a group based on how it exercises its associational and free

speech rights violates d1e First Amendment. Id.; see also Clingmmt v. Beaver, 544 U.S. 581, 586-87

(2005) ~dcntifying "disqualif{ication] from public benefits and privileges" as "severe burdens on

associational rights" subject to strict scrutiny).

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The Supreme Court's decision in Christian Legal Socie!J v. Marti11e~ 130 S. Ct. 2971 (2010),

supports this view. There, the Court stressed that d1e government violates associational and free speech rights where it "single[sJ out organi2ations for disfavored treatment because of their points

of view." Id. at 2993. SB 323 contravenes this principle because its primary goal is to punish BSA

based on its views regarding certain conduct and its related membership policy which, the Supreme

Court held in Dale, is a central component of BSA's expression. Furd1er, Marti11ez involved a university's denial of recognition to groups that did not maintain a membership policy that was open

to "all-comers." Here, the St.'lte denies tax exempt status to BSA while granting it to a plethora of

civic, religious, social, political, and charitable organizations, see Cal. Rev. & T. Code§ 23701, el. seq., many of whom undoubtedly restrict membership and leadership based on their values or

viewpoints. 1 To strip BSA of ta.x exempt st.'\tus based on its values-based membership policy, while

granting that status to countless otl1er organizations tl1at select members based on their views and beliefs, violates BSA's free speech and associational rights.2 Moreover, Marti11ez also distinguished

between laws with a statewide impact and a university's policies governing a student organization

forum. See Martine~ 130 S. Ct. 2986 n. 14. Here, we are dealing with ta.x laws that impact nonprofit

groups across the State, which is a "context [that] differs markedly from the limited public forum at

issue" in MartiJie~ Id.

In addition to SB 323's targeted and unlawful attack against BSA, the bill also will violate the constitutional rights of many ro/igiau.r nonprofits d1at serve youth (and it may not stop with youth

organi2ations, as a simple amendment could extend the bill to a// nonprofits). Over and above the protections provided by the freedom of association, religious organizations also enjoy significant

protections under tl1e Free Exercise Clause. See Ho.rmma-Tabor Evallge/ica/ Lttherau Ch11rch and Scb. v. Equal Blllp't Opporlmu!J Co11JfJI 111, 132 S. Ct. 694, 703 (2012) (Free Exercise Clause prevents

government from "interfering wid1 the freedom of religious groups to select tl1eir own" leaders);

Colorado Christia11 U11it'. v. Weaver, 534 F.3d 1245, 1261 (10th Cir. 2008) (noting the Free Exercise and

Establishment Clauses work togcd1cr to "protcctO religious institutions from govemmenL'll

monitoring or second-guessing of d1eir religious beliefs and practices, whether as a condition to receiving benefits ... or as a basis for regulation or exclusion from benefits"). In Ha.rmma-Tabor, the

Supreme Court recognized that d1e Free Exercise Clause protects tl1e right of religious groups to

select tl1ose responsible for "conveying [d1cir] message and carrying out [tl1eir] mission" and deemed

it unlawful for the government to interfere with such decisions. 132 S. Ct. at 708-09.

SB 323 will clearly result in such unlawful interference. It will require religious youd1 ministries and sports associations to choose between complying with d1c law and abandoning d1eir

1 Tiu! Martiuez Court specifically noted that it was not addressing the constitutionality of a policy a11owing "[a] political ... group [to] insist that its leaders support its purposes and beliefs," while a "religious group cannot." 130 S. Ct. at 982. Notably, the four dissenters in Martimzviewed such a policy as clearly engaging in viewpoint discrimination. Jee id. at 3010 (Alita, J., dissenting); see also id. at 2999 (Kennedy, J ., concurring) (Martinez would "likely [have] ha(d) a different outcome" if CLS could have shown that Hastings' policy was "content based eid1cr in its formulation or evident purpose"). 2 Tius unequal treatment of similarly-siruated groups also violates BSNs right to equal protection of the laws. See City of Cleb1trne v. Ckb1tmt Livi11g Ctr., 473 U.S. 432, 439 (1 985) ("The Equal Protection Clause of the Fourteend1 Amendment . . . 1s essentially a direcbon that all persons similarly situaJed should be treated alike").

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belief-based membership and leadership standards, or defying tl1e law and suffering the severe penalty of losing their tax exempt status. This kind of interference with these groups' free exercise

and associational rights violates the First Amendment under 1-losaJJJia-Tabor. See also Sherbert v. Vemer, 374 U.S. 398,404 (1963) ("It is too late in the day to doubt that the liberties of religion and

expression may be infringed by the denial of or pbcing of conditions upon a benefit or privilege").

This brief summary only scratches the surface of tl1e myriad ways in which SB 323 endangers

fundamental First Amendment freedoms.

Conclusion

SB 323's punitive purpose and significant infringement of the associational, speech, and free exercise rights of innumerable nonprofit organizations in the State, among other things, militate

heavily against tlus bilL We respectfully request that you consider ilie concerns \viili SB 323 raised

in this letter as you evaluate and vote on this bill.

Cordially,

{)a4 a. Co;P;><> David A Cortman Alliance Defending Freedom Senior Counsel Vice President of Center for Religious Liberty

On behalf of:

Rebecca L. Eggleston, CA Bar No. 260140 Donald R. Lee, CA Bar No. 144703 David A. Valerio, CA Bar No. 133568 David E.C. Gettis, Ct\ Bar No. 21 1197 John Eastman, CA Bar No. 193726 Ryan M. Easter, CA Bar No. 204532 Kenneili C. Dickson, CA Bar No. 89368 Jcrad Beltz, CA Bar No. 241397 Ross S. Heckmann, CA Bar No. 160225 Casey L. Ames, CA Bar No. 270288 Timotl1y M. Smith, CA Bar No. 125534. C:uhcrine Talbot, CA Bar No. 145491 Mark Guevara, CA Bar No. 219956 Craig P. Alexander, CA Bar No. 132017 William P. Morrow, CA Bar No. 140772. Ga1y D. Leasure, Cr\ Bar No. 211160 Clark H. Summers, Jr, CA Bar No. 69454

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h~ Jeremy D. Tedesco Alliance Defending Freedom Senior Legal Counsel

~ David J. Hacker Alliance Defending Freedom Senior Legal Counsel

Stephen Patrick Shepard, CA Bar No. 153619 Angela Thompson, CA Bar No. 238708 AriliurJ. Pauly, Jr. CA Bnr No. 133585 Lu T. Nguyen, CA Bar No. 203229 Adeline Allen, CA B:u No. 280300 Brian Barner, CA Bar No. 268792 Douglas Kirk, CA Bar No. 125808 Mark B. Carson, CA Bar No. 288720 John Stewart, CA Bar No. 147954 Judiili Logan, CA Bar No. 160448 William J. Becker, Jr., CA Bar No. 134545 David L. Llewellyn, Jr., CA Bar No. 71706 Professor Chcyanna Jaffke, CA Bar No. 236802 Robert M. Taylor, Jr., CA Bar No. 33043 Charles S. LiMandri, CA B:u No. 110841 Andrew L. Westover, CA Bar No. 253398 Emily Younger, CA Bar No. 231485

Holly Carmichael, CA Bar No. 268436 Kevin W. Cisney, CA Bar No. 206498 Jeffrey N. Daly, CA Bar No. 59034

Aaron M. White, CA Bar No. 266453 George Davis, CA Bar No. 274857

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