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GLVWULFWFRXUWH[SODLQHGWKDWWKHSODLQWLIIVZHUHIRXQGWRKDYH             2485 (Stevens, J. dissenting opinion); it leaves a gaping hole
VWDQGLQJWREULQJWKLVVXLWDVPXQLFLSDOWD[SD\HUVZKRKDYHDQ              in the wall separating church and state.
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College I, 159 F.3d at 158 (citing Roemer, 426 U.S. at 758 n.                   LQVWLWXWLRQ EHFDXVH WKH WD[ EDVH RI WKH VWDWH DQG ORFDO
21.) So even though the loan agreement explicitly prohibits                     JRYHUQPHQWVZDVUHGXFHGE\WKH WD[H[HPSWERQGV7KH\
Lipscomb from using any bond-financed facilities for                            DVVHUWHG WKDW LI WD[H[HPSW ERQGV KDG QRW EHHQ LVVXHG
religious purposes, there is no way to prevent that from                        /LSVFRPE8QLYHUVLW\ZRXOGKDYHILQDQFHGDOORUSDUWRIWKH
happening here because of the University’s pervasively                          SURMHFWWKURXJKWD[DEOHERQGVZKLFKZRXOGKDYHSURYLGHG
religious character. Since the sectarian and secular activities                 VLJQLILFDQWUHYHQXHIRUWKHFLW\FRIIHUV
at Lipscomb are so inextricably intertwined, the government
cannot avoid excessive entanglement with the sectarian                             7KHWD[H[HPSWERQGVGRQRWFRQVWLWXWHDQLQGHEWHGQHVVRI
mission of the University. Agostini, 521 U.S. at 234.                           HLWKHUWKH%RDUGRUWKH0HWURSROLWDQ*RYHUQPHQW1HLWKHUWKH
Accordingly, the low-interest loan arranged by the Board                        %RDUGQRUWKH0HWURSROLWDQ*RYHUQPHQWFDQEHKHOGOLDEOHWR
through the issuance of the tax-exempt revenue bonds to                         SD\DQ\SRUWLRQRIWKHSULQFLSDORULQWHUHVWRQWKHERQGVRUDQ\
Lipscomb results in a violation of the Establishment Clause.                    FRVWVLQFLGHQWWRWKHLULVVXDQFH7(11&2'($11
Indeed, it is not at all clear that Lipscomb would have been                    1RVWDWHRUORFDOJRYHUQPHQWWD[UHYHQXHVKDYH
able to proceed with its construction and renovation project                    EHHQRUZLOOEHVSHQWDVDUHVXOWRIWKHLVVXDQFHRIWKHERQGV
without the issuance of the tax-exempt revenue bonds;
certainly, the record indicates that it would not have been                       7KH GLVWULFW MXGJH RULJLQDOO\ DVVLJQHG WR WKLV FDVH IRXQG
possible to proceed on such financially favorable terms.                        WKDWHYHQLIQRWD[PRQH\LVVSHQWWD[SD\HUVWDWXVLVSURSHU
                                                                                JURXQGVIRUDQ(VWDEOLVKPHQW&ODXVHFKDOOHQJHWRSROLFLHVWKDW
   The Supreme Court’s recent decision in Zelman, 122 S. Ct.                    DIIHFWWKHFLW\
VJHQHUDOUHYHQXHIXQG6XPPDU\MXGJPHQWZDV
at 2460, does not alter this conclusion, but indeed supports it.                GHQLHG RQ WKRVH JURXQGV DQG RQ LQWHUORFXWRU\ DSSHDO WKH
As noted by the Court in Zelman, "our decisions have drawn                      6L[WK &LUFXLW &RXUW RI $SSHDOV XSKHOG WKH GLVWULFW FRXUW¶V
a consistent distinction between government programs that                       GHFLVLRQ DV WR VWDQGLQJ  6WHHOH Y ,QGXV 'HY %G RI WKH
provide aid directly to religious schools . . . and programs of                 0HWUR*RY
WRI1DVKYLOOHDQG'DYLGVRQ&RXQW\)G
true private choice, in which government aid reaches religious                  WK&LUXQSXEOLVKHGWDEOHGHFLVLRQFHUWGHQLHG
schools only as a result of the genuine and independent                         866&W/(GG
choices of private individuals." Id. at 2465 (citations                           :LWK UHJDUG WR WKH PHFKDQLFV RI WKH ERQGV DW LVVXH WKH
omitted.).7KH&RXUWDGGHG                                                   GLVWULFWFRXUW¶VGHFLVLRQDJDLQSURYLGHVDWKRURXJKVXPPDU\
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  JRYHUQPHQW DLG SURJUDP LV QHXWUDO ZLWK UHVSHFW WR                         $ SULYDWH DFWLYLW\ ERQG LV GHILQHG LQ UHOHYDQW
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                                                                                  LVVXHZKLFKPHHWVWKHSULYDWHORDQILQDQFLQJWHVW
     
      7KH PDMRULW\ RSLQLRQ UXQV WKLV GLVWLQFWLRQ WRJHWKHU FLWLQJ LQ IRRWQRWH     86&D7KHSULYDWHORDQILQDQFLQJ
WKUHH FDVHV LQYROYLQJ government aid provided directly to religious               WHVW LV PHW ZKHUH WKH DPRXQW RI WKH SURFHHGV RI WKH
schools with those involving government aid that reaches religious                LVVXHZKLFKDUHWREHXVHGGLUHFWO\RULQGLUHFWO\WRPDNH
schools through individuals.
      6WHHOHHWDOY,QGXVWULDO                1RV    1RV                  6WHHOHHWDOY,QGXVWULDO   
       'HY%GHWDO                                                           'HY%GHWDO

    RUILQDQFHORDQVWRSHUVRQVRWKHUWKDQJRYHUQPHQWDO           religious organizations from taxes, as it would were it to
    XQLWV H[FHHGV WKH OHVVHU RI $  SHUFHQW RI VXFK        subsidize them. The exemption simply leaves untouched
    SURFHHGV RU %   86&  F        that which adherents of the organization bring into being
                                                              and maintain.
    ,QRUGHUIRUWKHLQWHUHVWRQWKHERQGVWREHH[HPSWIURP        Id. at 693.
    IHGHUDOWD[DWLRQWKHSULYDWHDFWLYLW\ERQGVPXVWDOVREH
    TXDOLILHG XQGHU  86&  H  7KHUH DUH       Although no state funds were transferred through the
    WKUHHFULWHULDWKDWDERQGLVVXDQFHPXVWPHHWXQGHUWKLV        revenue-bond financing employed in this case, the form of
    VHFWLRQ )LUVW WKH ERQG PXVW IDOO ZLWKLQ RQH RI WKH   state aid at issue, however, exhibits the "affirmative
    HQXPHUDWHG FDWHJRULHV $ DQ H[HPSW IDFLOLW\ ERQG      involvement characteristic of outright governmental subsidy."
    %DTXDOLILHGPRUWJDJHERQG&DTXDOLILHGYHWHUDQV
        Id. at 691. Here, the Board and Metro do not play a "passive"
    PRUWJDJHERQG'DTXDOLILHGVPDOOLVVXHERQG(D          role, but rather "affirmatively foster" the activities of
    TXDOLILHG VWXGHQW ORDQ ERQG ) D TXDOLILHG              Lipscomb by acceding to its request for a low-interest loan
    UHGHYHORSPHQWERQGRU*DTXDOLILHGFERQG         funded by tax-exempt revenue bonds. Moreover, the tax-
    86&H6HFRQGWKHERQGLVVXH           exempt revenue financing does not "simply leave[] untouched
    PXVWPHHWWKHYROXPHFDSUHTXLUHPHQWVRIVHFWLRQ           that which adherents of the organization bring into being and
    86&HVHHDOVR86&          maintain." Id. Instead, the issuance of the low-interest loan
      )LQDOO\ WKH ERQG LVVXH PXVW PHHW WKH          to the pervasively sectarian educational institution in this case
    UHTXLUHPHQWV RI HDFK DSSOLFDEOH VXEVHFWLRQ RI VHFWLRQ     "employs the organs of government for essentially religious
      86&  H  8QGHU WKH SXEOLF     purposes" by allowing Lipscomb to fund improvements to its
    DSSURYDOUHTXLUHPHQWRIVHFWLRQILQRUGHUWREHD        University in order to advance its sectarian mission. Id. By
    TXDOLILHGERQGDSULYDWHDFWLYLW\ERQGPXVWEHDSSURYHG         providing a low-interest loan funded by tax-exempt revenue
    E\ERWKWKHJRYHUQPHQWDOXQLWLVVXLQJWKHERQGDQGWKH          bonds to a pervasively sectarian educational institution, the
    JRYHUQPHQWDOXQLWWKDWKDVMXULVGLFWLRQRYHUWKHDUHDLQ        Board and Metro provided the kind of state aid that is
    ZKLFKWKHIDFLOLW\UHFHLYLQJILQDQFLQJWKURXJKWKHERQG         characteristic of a direct governmental subsidy.
    SURFHHGVLVORFDWHG6HH86&I$
                                                                      Consequently, given Lipscomb’s pervasively sectarian
    $ ERQG WKDW PHHWV HDFK RI WKHVH FULWHULD ZLOO EH       character, it must be concluded that Lipscomb’s receipt of a
    GHVLJQDWHGDVDTXDOLILHGSULYDWHDFWLYLW\ERQGXQGHU        direct economic benefit in the form of a low-interest $15
    86&    :KHUH WKH ERQGV LVVXHG DUH TXDOLILHG    million loan resulted in excessive governmental entanglement
    SULYDWHDFWLYLW\ERQGVWKHLQWHUHVWIURPWKHERQGVZLOOEH     with the religious mission of the University. In view of
    H[HPSWIURPIHGHUDOWD[DWLRQ86&           Lipscomb’s "character and purposes," Agostini, 521 U.S. at
6WHHOH)6XSSGDWHPSKDVLVDGGHG                     232 (quoting Lemon, 403 U.S. at 615), its "secular activities
                                                                    cannot be separated from sectarian ones." Roemer, 426 U.S.
  ,QWKHLQVWDQWFDVHWKHERQGVZHUHLVVXHGIRUWKHEHQHILWRI     at 755. Because the religious and secular functions are
/LSVFRPE8QLYHUVLW\DSULYDWHHGXFDWLRQDOLQVWLWXWLRQ7KH        inseparable at Lipscomb, "no safeguard can ensure that direct
ERQGVZHUHLVVXHGIRUWKHSXUSRVHRIUHQRYDWLQJIDFLOLWLHVRQ       monetary aid, even if designated to fund the school’s secular
                                                                    functions, will not aid its religious mission." Columbia
    6WHHOHHWDOY,QGXVWULDO               1RV       1RV                       6WHHOHHWDOY,QGXVWULDO         
      'HY%GHWDO                                                                  'HY%GHWDO

that a direct economic benefit accrues to such an institution as     /LSVFRPE8QLYHUVLW\¶VFDPSXV7KLVPHHWVWKHSULYDWHORDQ
a result of the government’s active participation in arranging       ILQDQFLQJWHVWRIVHFWLRQFEHFDXVHWKHHQWLUHDPRXQWRI
for a low-cost loan that enables the institution to advance its      ERQGSURFHHGVORDQHGWR/LSVFRPE8QLYHUVLW\H[FHHGHGWKH
sectarian mission.                                                   VWDWXWRU\PLQLPXPORDQDPRXQW7KHUHIRUHWKHERQGVPD\EH
                                                                     FKDUDFWHUL]HG DV SULYDWH DFWLYLW\ ERQGV XQGHU  86&
  In view of the government’s direct involvement with                D)XUWKHUWKH/RDQ$JUHHPHQWEHWZHHQWKH
advancing the religious mission of a pervasively sectarian           %RDUGDQG/LSVFRPE8QLYHUVLW\VSHFLILFDOO\SURKLELWVLWIURP
educational institution, it cannot be said that this form of state   XVLQJ DQ\ ERQGILQDQFHG IDFLOLWLHV IRU UHOLJLRXV SXUSRVHV
aid comes within Walz v. Tax Comm’n, 397 U.S. 664 (1970),            7KHERQGVLQTXHVWLRQPHHWWKHWHFKQLFDOUHTXLUHPHQWVRI
where the Supreme Court upheld a property tax exemption to           86&
religious organizations for properties used solely for religious
worship. See Hunt, 413 U.S. at 745 n. 7. As noted in the                )RUWKHERQGVWREHTXDOLILHGDVWD[H[HPSWWKH\PXVWDOVR
concurring opinion of Justice Brennan in Walz, while general         PHHWWKHFULWHULDXQGHUVHFWLRQH7KHERQGVPHHWWKH
subsidies of religious activities would constitute                   ILUVWFULWHULDIRUEHLQJDTXDOLILHGSULYDWHDFWLYLW\ERQGXQGHU
impermissible state involvement with religion, tax                   VHFWLRQHEHFDXVHWKHERQGVDUHTXDOLILHGF
exemptions "constitute mere passive state involvement with           ERQGV ZKLFK LV RQH RI WKH HQXPHUDWHG FDWHJRULHV RI ERQG
religion and not the affirmative involvement characteristic of       W\SHVXQGHUWKLVVHFWLRQ6HH86&H
outright government subsidy." Walz, 397 U.S. at 690-91. As           $TXDOLILHGFERQGLVGHILQHGLQVHFWLRQDDVD
explained by Justice Brennan:                                        SULYDWH DFWLYLW\ ERQG ZKHUH DOO SURSHUW\ ZKLFK LV WR EH
                                                                     SURYLGHGE\WKHQHWSURFHHGVRIWKHLVVXHLVWREHRZQHGE\D
    Tax exemptions and general subsidies, however, are               FRUJDQL]DWLRQ86&D$OO
  qualitatively different. Though both provide economic              RIWKHSURFHHGVRIWKHERQGLVVXHZHUHORDQHGWR
  assistance, they do so in fundamentally different ways.            /LSVFRPE8QLYHUVLW\IRUXVHLQEXLOGLQJQHZIDFLOLWLHVDQGLQ
  A subsidy involves the direct transfer of public monies to         UHQRYDWLQJ H[LVWLQJ IDFLOLWLHV  /LSVFRPE 8QLYHUVLW\ LV D
  the subsidized enterprise and uses resources exacted from          UHJLVWHUHG F RUJDQL]DWLRQ WKHUHE\ VDWLVI\LQJ WKLV
  the taxpayers as a whole. An exemption, on the other               UHTXLUHPHQW
  hand, involves no such transfer. It assists the exempted
  enterprise only passively, by relieving a privately funded
  venture of the burden of paying taxes.
                                                                         
                                                                          7KH /RDQ $JUHHPHQW EHWZHHQ /LSVFRPE 8QLYHUVLW\ DQG WKH %RDUG
Id. (footnotes omitted.) Thus, in finding that the property          GRHV FRQWDLQ D UHVWULFWLYH XVH SURYLVLRQ 6HFWLRQ  RQ 6SHFLDO
exemptions in question did not rise to the level of excessive        &RYHQDQWV VWDWHV
governmental involvement, Justice Brennan noted:                         V 7KH %RUURZHU ZLOO QRW XVH WKH 3URMHFW RU DQ\ SDUW WKHUHRI IRU
                                                                         VHFWDULDQ LQVWUXFWLRQ RU DV D SODFH RI UHOLJLRXV ZRUVKLS RU LQ
  To the extent that the exemptions further secular ends,                FRQQHFWLRQ ZLWK DQ\ SDUW RI WKH SURJUDP RI D VFKRRO RU
  they do not advance "essentially religious purposes." To               GHSDUWPHQW RI GLYLQLW\ IRU DQ\ UHOLJLRXV GHQRPLQDWLRQ RU WKH
  the extent that purely religious activities are benefited by           WUDLQLQJ RI PLQLVWHUV SULHVWV UDEELV RU RWKHU VLPLODU SHUVRQV LQ
  the exemptions, the benefit is passive. Government does                WKH ILHOG RI UHOLJLRQ
  not affirmatively foster these activities by exempting             6WHHOH  ) 6XSSG DW  FLWLQJ 'RFNHW 1R  DWWDFK ([  DW 
        6WHHOHHWDOY,QGXVWULDO                    1RV     1RV                 6WHHOHHWDOY,QGXVWULDO   
         'HY%GHWDO                                                               'HY%GHWDO

  7KHGLVWULFWFRXUWVXPPDUL]HGWKHILQDOUHTXLUHPHQWDVWR                fundamental character of the government’s participation in
SXELFKHDULQJDQGORFDODSSURYDODVIROORZV                               this kind of financing arrangement. In this respect, it is
                                                                           important to examine the reasoning of the Virginia Supreme
    >$@ SULYDWH DFWLYLW\ ERQG ZLOO QRW EH D TXDOLILHG ERQG        Court in Lynn, which found that the governmental aid
    XQOHVV LW PHHWV WKH VXEVHFWLRQ
V SXEOLF DSSURYDO                 involved in the revenue-bond financing in that case did not
    UHTXLUHPHQW   86&  I   7KLV                 amount to "direct aid" to Regent University, a pervasively
    UHTXLUHPHQWLVVDWLVILHGZKHUHWKHERQGLVVXHKDVEHHQ                 sectarian educational institution, because no governmental aid
    ERWK  DSSURYHG HLWKHU E\ RU RQ EHKDOI RI WKH               was received by the University since the bond proceeds are
    JRYHUQPHQWDO XQLW WKDW LVVXHG WKH ERQGV DQG                     funds of private investors. 538 S.E.2d at 638. According to
     DSSURYHG E\ HDFK JRYHUQPHQWDO XQLW WKDW KDV                 Lynn, "Regent receives these funds because of the genuinely
    MXULVGLFWLRQRYHUWKHDUHDZKHUHDQ\IDFLOLWLHVZKLFKDUH              independent choices of investors," whose decisions to
    WR EH ILQDQFHG E\ WKH ERQG SURFHHGV DUH ORFDWHG           purchase the bonds "cannot be attributed to state decision
    86&I$,QHDFKFDVHWKHDSSURYDO                 making." Id. at 639 (citing Zobrest v. Catalina Foothills Sch.
    PXVW EH JLYHQ E\ HLWKHU WKH DSSOLFDEOH HOHFWHG                 Dist., 509 U.S. 1, 10 (1993)). Accordingly, the Virginia
    UHSUHVHQWDWLYHRIVXFKJRYHUQPHQWDOXQLWDIWHUDSXEOLF                Supreme Court concluded that there was no Establishment
    KHDULQJ IROORZLQJ UHDVRQDEOH QRWLFH RU E\ D YRWHU              Clause violation because "[n]o government funds ever reach
    UHIHUHQGXP RI WKH JRYHUQPHQWDO XQLW  86&                   Regent’s coffers." Id.
    I%7KHHOHFWHGUHSUHVHQWDWLYHPD\EHDQ
    HOHFWHGOHJLVODWLYHERG\RIWKHJRYHUQPHQWDOXQLWWKH                   What is being ignored in this account is the fact that the
    FKLHI HOHFWHG H[HFXWLYH RIILFHU WKH FKLHI HOHFWHG 6WDWH        government provides the pervasively sectarian educational
    OHJDORIILFHURIWKHH[HFXWLYHEUDQFKRUDQ\RWKHUHOHFWHG            institution with a direct economic benefit in the form of a
    RIILFLDORIVXFKXQLWGHVLJQDWHGIRUWKHSXUSRVHVRIWKLV              low-interest loan, which the institution would not be able to
    SDUDJUDSKE\VXFKFKLHIHOHFWHGH[HFXWLYHRIILFHURUE\                obtain without the direct participation of the government.
    6WDWHODZ86&I(L6WHHOH               Thus, although it is true that no state funds are being
    )6XSSGDW                                                transferred through this kind of financing mechanism, the
                                                                           relevant question is whether the government has provided the
                                                                           pervasively sectarian educational institution with a direct
                                                                          economic benefit. Contrary to the understanding of the court
     7KH VFRSH RI WKH JRYHUQPHQWDO DSSURYDO LV DGGUHVVHG LQ IHGHUDO
UHJXODWLRQV ZKLFK VWDWH                                                  in Lynn, a direct economic benefit is not necessarily
                                                                           determined by merely looking at whether there was a
     $Q LVVXH LV WUHDWHG DV DSSURYHG LI WKH JRYHUQPHQWDO XQLWV  KDYH    transference of governmental money. To constitute a direct
     DSSURYHG HLWKHU  L 7KH LVVXH  QRW PRUH WKDQ RQH \HDU EHIRUH
     WKH GDWH RI LVVXH RU LL $ SODQ RI ILQDQFLQJ IRU HDFK IDFLOLW\
                                                                           economic benefit to a pervasively sectarian educational
     ILQDQFHG E\ WKH LVVXH SXUVXDQW WR ZKLFK WKH LVVXH LQ TXHVWLRQ LV      institution, it is sufficient that the government makes it
     WLPHO\ LVVXHG DV UHTXLUHG LQ SDUDJUDSK I RI WKLV VHFWLRQ ,Q   possible for the institution to obtain economic aid that it
     HLWKHU FDVH WKH VFRSH RI WKH DSSURYDO LV GHWHUPLQHG E\ WKH           would not otherwise be able to obtain without the
     LQIRUPDWLRQ DV VSHFLILHG LQ SDUDJUDSK I FRQWDLQHG LQ WKH
                                                                           government’s direct participation. That no governmental
     QRWLFH RI KHDULQJ  DQG WKH DSSURYDO  ,QIRUPDWLRQ UHTXLUHG
     $ IDFLOLW\ LV ZLWKLQ WKH VFRSH RI DQ DSSURYDO LI WKH QRWLFH RI
                                                                           funds actually reach the coffers of the pervasively sectarian
     KHDULQJ  DQG WKH DSSURYDO FRQWDLQ  L $ JHQHUDO IXQFWLRQDO      educational institution does not alter for one moment the fact
     GHVFULSWLRQ RI WKH W\SH DQG XVH RI WKH IDFLOLW\ WR EH ILQDQFHG 
    6WHHOHHWDOY,QGXVWULDO               1RV      1RV                       6WHHOHHWDOY,QGXVWULDO          
      'HY%GHWDO                                                                 'HY%GHWDO

lots, landscaping, computer mainframe, baseball stadium,              ,QWKLVFDVHWKHERQGLVVXHZDVDSSURYHGE\WKH,QGXVWULDO
tennis courts, fiber optic network, a pedestrian walkway, and       'HYHORSPHQW%RDUGDVWKHJRYHUQPHQWDOXQLWWKDWLVVXHGWKH
renovate its administration and business school buildings.          ERQGVDQGE\0D\RU%LOO%RQHUDVWKHFKLHIHOHFWHGH[HFXWLYH
Through the low-interest loan, Lipscomb was thereby able to         RIILFHU RI 0HWURSROLWDQ *RYHUQPHQW RI 1DVKYLOOH DQG
improve its facilities to increase its student enrollment to        'DYLGVRQ &RXQW\ WKH JRYHUQPHQWDO XQLW LQ ZKLFK WKH
3,000, and thus advance its sectarian mission.                      IDFLOLWLHVRI/LSVFRPE8QLYHUVLW\DUHORFDWHG
  The district court also properly rejected Defendants’             ,,67$1'$5'2)5(9,(:
argument that Lipscomb’s economic benefit came from the
bond purchasers who purchased the tax-exempt revenue                  7KLV&RXUWUHYLHZVWKHGLVWULFWFRXUW¶VJUDQWRIVXPPDU\
bonds, and not from the government. Properly understood,            MXGJPHQWGHQRYR6HH*ULEFKHFNY5XQ\RQ)G
Lipscomb received a direct economic benefit in the form of a        WK&LU7KHVWDQGDUGVDSSOLFDEOHWRVXFKUHYLHZ
low-interest government sponsored loan. For Establishment           DUHZHOOHVWDEOLVKHG
Clause purposes, it is immaterial that the Board subsequently
assigned the loan to Sovran Bank.                                     6XPPDU\ MXGJPHQW LV DSSURSULDWH ZKHUH QR JHQXLQH
                                                                      LVVXHRIPDWHULDOIDFWH[LVWVVRWKDWWKHPRYDQWLVHQWLWOHG
   The district court also correctly rejected Defendants’             WRMXGJPHQWDVDPDWWHURIODZ)HG5&LY3F7KH
argument that the bondholders, not Lipscomb, are the true             FRXUWGHWHUPLQHVZKHWKHU³WKHUHDUHDQ\JHQXLQHIDFWXDO
beneficiaries of the aid program. As the district court               LVVXHVWKDWSURSHUO\FDQEHUHVROYHGRQO\E\DILQGHURI
properly noted, the Supreme Court in Hunt examined a                  IDFWEHFDXVHWKH\PD\UHDVRQDEO\EHUHVROYHGLQIDYRURI
similar transaction and found that "[t]he income tax-exempt           HLWKHUSDUW\´$QGHUVRQY/LEHUW\/REE\,QF86
status of the interest enables the Authority, as an                   6&W/(GG2I
instrumentality of the State, to market the bonds at a                FRXUVH³LQIHUHQFHVWREHGUDZQIURPWKHXQGHUO\LQJIDFWV
significantly lower rate of interest than the educational             PXVWEHYLHZHGLQWKHOLJKWPRVWIDYRUDEOHWRWKHSDUW\
institution would be forced to pay if it borrowed the money           RSSRVLQJWKHPRWLRQV´0DWVXVKLWD(OHF,QGXV&RY
by conventional private financing." Steele, 117 F.Supp.2d at          =HQLWK 5DGLR &RUS  86    6&W
717 (quoting Hunt, 413 U.S. at 739). Thus, the district court           /(GG    7KH PRYDQW PHHWV LWV
rightly concluded that "Lipscomb received a flow of funds
into its coffers provided by a loan from the Board. These
funds did not merely supplement the teaching of secular                 LL 7KH PD[LPXP DJJUHJDWH IDFH DPRXQW RI REOLJDWLRQV WR EH
subjects at Lipscomb; they were central to the school’s stated          LVVXHG ZLWK UHVSHFW WR WKH IDFLOLW\ LLL 7KH LQLWLDO RZQHU
                                                                        RSHUDWRU RU PDQDJHU RI WKH IDFLOLW\      LY 7KH SURVSHFWLYH
goal of increasing enrollment. If Lipscomb’s mission is to
                                                                        ORFDWLRQ RI WKH IDFLOLW\ E\ LWV VWUHHW DGGUHVV RU LI QRQH E\ D
promote Churches of Christ doctrine, then Metro, through the            JHQHUDO GHVFULSWLRQ GHVLJQHG WR LQIRUP UHDGHUV RI LWV VSHFLILF
Board, provided aid to promote Churches of Christ doctrine."            ORFDWLRQ  $Q DSSURYDO RU QRWLFH RI SXEOLF KHDULQJ ZLOO QRW EH
Steele, 117 F. Supp.2d at 718.                                          FRQVLGHUHG WR EH DGHTXDWH LI DQ\ RI WKH LWHPV LQ VXEGLYLVLRQV L
                                                                        WKURXJK LY RI WKLV VXESDUDJUDSK  ZLWK UHVSHFW WR WKH IDFLOLW\
  It should be pointed out, at this juncture, that characterizing       WR EH ILQDQFHG DUH XQNQRZQ RQ WKH GDWH RI WKH DSSURYDO RU WKH
                                                                        GDWH RI WKH SXEOLF QRWLFH
the role of the state as a "mere conduit" on the basis that the
use of governmental funds is not involved ignores the                &)5  II 
       6WHHOHHWDOY,QGXVWULDO                   1RV         1RV                 6WHHOHHWDOY,QGXVWULDO   
         'HY%GHWDO                                                                  'HY%GHWDO

  LQLWLDOEXUGHQ³E\µVKRZLQJ¶±WKDWLVSRLQWLQJRXWWRWKH                   receipts from any such facilities and secured by a pledge
  GLVWULFWFRXUW±WKDWWKHUHLVDQDEVHQFHRIHYLGHQFH WR                     of said revenues and receipts.
  VXSSRUWWKHQRQPRYLQJSDUW\¶VFDVH´&HORWH[&RUSY
  &DWUHWW  86    6&W                     (J.A. at 130-31.) Thus, contrary to the protestations of the
  /(GG    $W WKDW SRLQW WKH QRQPRYDQW                  Board and Metro, it is clear that because the Board is an
  ³PXVW VHW IRUWK VSHFLILF IDFWV VKRZLQJ WKDW WKHUH LV D             instrumentality of Metro, both Defendants were involved in
  JHQXLQHLVVXHIRUWULDO´)HG5&LY3H$QGHUVRQ                    the project benefiting Lipscomb, notwithstanding their
  86DW6&W                                            separate legal identity. Further, the district court properly
                                                                              rejected Metro’s contention that it could not be liable for an
&OD\WRQY0HLMHU,QF)GWK &LU                   Establishment Clause violation in this case because it only
FLWDWLRQRPLWWHG                                                           provided "host approval" for the bonds to be federally tax
                                                                              exempt. As the district court properly noted, Metro’s role in
,,,$1$/<6,6                                                                the financing was critical because the bonds could not have
                                                                              been issued as federally tax exempt without Metro’s
  7KHLVVXHSUHVHQWHGLQWKLVDSSHDOLVZKHWKHUWKHLVVXDQFH                  participation in approving the bond issue.
RI WD[ H[HPSW UHYHQXH ERQGV YLRODWHV WKH (VWDEOLVKPHQW
&ODXVHLIWKHERQGVDUHIRUWKHEHQHILWRIDQLQVWLWXWLRQIRXQG                Under the terms of the statute, local governments are
E\WKHGLVWULFWFRXUWWREHSHUYDVLYHO\VHFWDULDQ7KHLVVXH                authorized to offer low-interest loans by making funds
                                                                              available through the issuance of tax-exempt municipal
                                                                             bonds. Here, Lipscomb approached the Board seeking a low-
      ,Q WKH IROORZLQJ FDVHV WKH 6XSUHPH &RXUW IRXQG JRYHUQPHQW DLG          interest development loan funded by the proceeds of the tax-
SURJUDPV FRQVWLWXWLRQDO 0LWFKHOO Y +HOPV  86  
                                                                              exempt bond issuance. While the money that went to
SOXUDOLW\ SURYLGLQJ HGXFDWLRQDO PDWHULDOV DQG HTXLSPHQW WR UHOLJLRXV
VFKRROV XSKHOG $JRVWLQL Y )HOWRQ  86   DOORZLQJ
                                                                              Lipscomb ultimately came from private investors who
UHPHGLDO SXEOLF VFKRRO WHDFKHUV DQG FRXQVHORUV WR DVVLVW DW UHOLJLRXV         purchased the tax-exempt revenue bonds, and while
VFKRRO 5RVHQEHUJHU Y 5HFWRU DQG 9LVLWRUV RI 8QLY RI 9LUJLQLD          Lipscomb must repay Sovran Bank for the loan, the direct
86    SURYLGLQJ SULQWLQJ IDFLOLWLHV IRU DOO TXDOLILHG VWXGHQW     economic benefit that Lipscomb received from the
SXEOLFDWLRQV LQFOXGLQJ UHOLJLRXV SXEOLFDWLRQ FRQVWLWXWLRQDO =REUHVW Y
                                                                              governmental entities, as the district court pointed out, was
&DWDOLQD )RRWKLOOV 6FK 'LVW  86   SURYLGLQJ D VLJQ
ODQJXDJH LQWHUSUHWHU IRU GHDI FKLOG LQ UHOLJLRXV VHFRQGDU\ VFKRRO QRW
                                                                              the low-interest "loan from the Board and, hence, from
XQFRQVWLWXWLRQDO %RZHQ Y .HQGULFN  86   IXQGLQJ IRU        Metro." Steele, 117 F. Supp.2d at 717.
DEVWLQHQFHEDVHG IDPLO\ SODQQLQJ SURJUDPV RIIHUHG E\ UHOLJLRXV VRFLDO
ZHOIDUH DJHQF\ IRXQG FRQVWLWXWLRQDO :LWWHUV Y :DVKLQJWRQ 'HSW RI            Thus, even though there was no direct transfer of money
6HUYLFHV IRU WKH %OLQG  86   RIIHULQJ YRFDWLRQDO HGXFDWLRQ
                                                                              from the Board to Lipscomb, the district court correctly found
VFKRODUVKLS WR YLVXDOO\ GLVDEOHG VHPLQDULDQ QRW XQFRQVWLWXWLRQDO
&RPPLWWHH IRU 3XE (GXF DQG 5HOLJLRXV /LEHUW\ Y 5HJDQ  86 
                                                                              that "[t]he money went directly to Lipscomb in the form of a
 UHLPEXUVLQJ UHOLJLRXV VFKRRO IRU SHUIRUPLQJ VWDWHPDQGDWHG            loan from the Board, an instrumentality of Metro." Id., 117
VWDQGDUGL]HG WHVWV DQG UHFRUG NHHSLQJ :ROPDQ Y :DOWHU  86         F. Supp.2d at 720. As a result of the low-interest loan of $15
 SURYLGLQJ WH[WERRN ORDQV YRFDWLRQDO WUDLQLQJ GLDJQRVWLF VHUYLFHV   million originated by the Board at Lipscomb’s request,
WKHUDSHXWLF DQG UHPHGLDO VHUYLFHV DQG VWDQGDUGL]HG WHVWLQJ DQG VFRULQJ IRU   Lipscomb thus saved about 30% of the cost of its campus
UHOLJLRXV VFKRRO 5RHPHU Y %G RI 3XE :RUNV  86  
VXEVLGL]LQJ SHUVWXGHQW WR D UHOLJLRXV FROOHJH FRQVWLWXWLRQDO 7LOWRQ Y
                                                                              building projects. These savings enabled Lipscomb to fund
5LFKDUGVRQ  86   ILQGLQJ FRQVWUXFWLRQ JUDQWV WR               the new library, intramural sports building and field, parking
   6WHHOHHWDOY,QGXVWULDO               1RV      1RV                       6WHHOHHWDOY,QGXVWULDO       
     'HY%GHWDO                                                                 'HY%GHWDO

providing every religion with an equal opportunity (say, to        KDVQRWEHHQDGGUHVVHGE\RWKHU&LUFXLWVRUE\WKH6XSUHPH
secure state funding or to pray in public schools), but by         &RXUW
drawing fairly clear lines of separation between church and
state") (emphasis in original). :KDWPDWWHUVLQWKLVFDVHWKHQ     7KH)LUVW$PHQGPHQWDSSOLFDEOHWRWKHVWDWHVWKURXJKWKH
LV RQO\ ZKHWKHU WKH VWDWH DLG SURYLGHG WR /LSVFRPE D     )RXUWHHQWK$PHQGPHQWSURYLGHVWKDW&RQJUHVVVKDOOPDNH
SHUYDVLYHO\ VHFWDULDQ LQVWLWXWLRQ LV LQ YLRODWLRQ RI WKH
(VWDEOLVKPHQW&ODXVH
  The district court properly concluded that the Establishment     UHOLJLRXVO\ DIILOLDWHG FROOHJH FRQVWLWXWLRQDO %G RI (GXF Y $OOHQ 
Clause was violated because Lipscomb received a direct             86   ORDQLQJ RI WH[WERRNV IRU UHOLJLRXV VFKRRO XSKHOG
                                                                   (YHUVRQ Y %G RI (GXF  86   UHLPEXUVLQJ SDUHQWV IRU EXV
economic benefit from the government, which resulted in            WUDQVSRUWDWLRQ FRVWV WR UHOLJLRXV VFKRRO FRQVWLWXWLRQDO &RFKUDQ Y
excessive entanglement of the government with the religious        /RXLVLDQD 6WDWH %G RI (GXF  86   ORDQLQJ WH[WERRNV WR
institution. Although the district court noted that "[t]here is    UHOLJLRXV VFKRRO FRQVWLWXWLRQDO %UDGILHOG Y 5REHUWV  86  
no single, clear definition of ‘direct benefit’ to control this    DOORZLQJ IHGHUDO IXQGV WR EXLOG D &DWKROLF KRVSLWDO FRQVWLWXWLRQDO
analysis," Black’s Law Dictionary defines "direct" in the              
relevant sense as "[i]mmediate; proximate; by the shortest               6HYHUDO VWDWH FRXUWV KDYH DGGUHVVHG WKH SUHFLVH LVVXH DOO KDYH IRXQG
course; without circularity; operating by an immediate             WKDW WKH LVVXDQFH RI LQGXVWULDO UHYHQXH ERQGV LV QRW WDQWDPRXQW WR WKH
                                                                   JLYLQJ RI GLUHFW DLG WR UHOLJLRXV VFKRROV 2SLQLRQ RI WKH -XVWLFHV 
connection or relation, instead of operating through a             0DVV   1(G     FRQFOXGLQJ WKDW WD[H[HPSW
medium; the opposite of indirect." Black’s Law Dictionary          ERQG ILQDQFLQJ LV QRW D IRUP RI GLUHFW DVVLVWDQFH WR SULYDWH RU UHOLJLRXV
459 (6th ed. 1990). In contrast, "indirect" is defined as "[n]ot   FKDULWDEOH LQVWLWXWLRQV DV WKHUH ZDV QR JUDQW RU DSSURSULDWLRQ RI SXEOLF
direct in relation or connection; not having an immediate          PRQH\ QR ORDQ RI SXEOLF FUHGLW DQG WKH SDUWLFLSDQWV ERUH DOO FRVWV RI WKH
bearing or application; not related in the natural way." Id. at    SURJUDP 9HUPRQW (GXF %OGJV )LQDQFLQJ $JHQF\ Y 0DQQ  $G
                                                                     9W  DSS GLVP¶G  86   VDPH 1RKUU Y
773.                                                               %UHYDUG &RXQW\ (GXF )DFLOLWLHV $XWK  6RG   )OD 
                                                                   VDPH &HUFOH Y ,OO (GXF )DFLOLWLHV $XWK  1(G   ,OO
   As the district court correctly noted, the Board and Metro       VDPH &DOLI (GXF )DFLOLWLHV $XWK Y 3ULHVW  3G  
were both directly connected to the project benefiting              &DO  VDPH 0LQQ +LJKHU (GXF )DFLOLWLHV $XWK Y +DZN 
Lipscomb. According to the official statement regarding the        1:G  0LQQ  :DVKLQJWRQ +LJKHU (GXF )DFLOLWLHV $XWK
                                                                   Y *DUGQHU  3G    :DVK  KROGLQJ WKDW WKH
issuance of $15 million in educational facilities refunding        WD[ H[HPSW VWDWXV GLG QRW FUHDWH D GHEW RU D ERUURZHUOHQGHU UHODWLRQVKLS
bonds,                                                             EHWZHHQ WKH VWDWH DQG WKH UHOLJLRXVO\ DIILOLDWHG XQLYHUVLWLHV RU WKH
                                                                   ERQGKROGHUV WKH ERQG SURFHHGV QHYHU HQWHUHG WKH SXEOLF WUHDVXU\
    The Issuer [the Board] was created on May 6, 1959              UHSD\PHQW GLG QRW SDVV WKURXJK WKH SXEOLF WUHDVXU\ DQG QR VWDWH GHEW ZDV
  pursuant to the Act as a public corporation and                  FUHDWHG &RUWH] Y ,QGHSHQGHQFH &RXQW\  6:G   $UN
                                                                    FRQFOXGLQJ WKDW WKH WD[H[HPSW UHYHQXH ERQGV ZHUH QRW D SOHGJH
  instrumentality of the Metropolitan Government of
                                                                   RI SXEOLF PRQH\ 9LUJLQLD &ROOHJH %OGJ $XWK Y /\QQ  6(G 
  Nashville and Davidson County, Tennessee, for the                 9D  ILQGLQJ WKDW WKH DLG UHFHLYHG IURP WD[H[HPSW UHYHQXH
  purpose, among other things, of financing educational            ERQGV GRHV QRW LQYROYH XVDJH RI JRYHUQPHQWDO IXQGV LQ WKH WUDGLWLRQDO
  facilities with a view to promoting the education of the         VHQVH LQ ZKLFK WKH WHUPV KDYH EHHQ XVHG 6HH DOVR 'XUKDP Y 0F/HRG
  people of the State of Tennessee. The Issuer is                   6(G   6&  DSS GLVP¶G IRU ZDQW RI D VXE¶O IHG¶O
                                                                   TXHVWLRQ  86   ILQGLQJ WKDW WD[IUHH UHYHQXH ERQGV
  authorized by the Act to issue revenue bonds, including          VDWLVILHG VROHO\ E\ VWXGHQW ORDQ SD\PHQW ZHUH QHLWKHU D VWDWH GHEW QRU
  refunding bonds, payable solely from the revenues and            SXEOLF PRQH\ RU FUHGLW
   6WHHOHHWDOY,QGXVWULDO                 1RV     1RV                  6WHHOHHWDOY,QGXVWULDO    
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  86DW                                                 86 DW  &ROXPELD 8QLRQ ,  )G DW  FLWLQJ
                                                                    5RHPHU  86 DW   )XUWKHU LW LV RI QR OHJDO
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                                                                    IDYRUHG RU GLVIDYRUHG RQH UHOLJLRQ RYHU DQRWKHU´  6HH
  7KHGLVWULFWFRXUWPDGHWKHIROORZLQJILQGLQJ                    Zelman, 122 S. Ct. at 2505 (Breyer, J. dissenting opinion)
                                                                    (noting "the development of constitutional doctrine that reads
  7KHHYLGHQFHSUHVHQWHGLQWKHGHSRVLWLRQVDQGOLWHUDWXUH          the Establishment Clause as avoiding religious strife, not by
  RI/LSVFRPEVKRZVWKDWZKLOH/LSVFRPEPD\HIIHFWLYHO\
    6WHHOHHWDOY,QGXVWULDO                1RV       1RV                   6WHHOHHWDOY,QGXVWULDO    
      'HY%GHWDO                                                               'HY%GHWDO

  the present case under Walz v. Tax Comm'n, 397 U.S.                   WHDFK D ZLGH YDULHW\ RI VHFXODU FRXUVHV WKH FHQWUDO
  664, 90 S.Ct. 1409, 25 L.Ed.2d 697 (1970), where this                 PLVVLRQ RI WKH VFKRRO LV WR LQFXOFDWH DQG SURPRWH
  Court upheld a local property tax exemption which                     &KXUFKHV RI &KULVW GRFWULQH DV WKH WUXH ZRUG RI *RG
  included religious institutions.                                      6WXGHQWV DUH WDXJKW HQWLUHO\ E\ &KXUFKHV RI &KULVW
                                                                        PHPEHUVDUHLQIRUPHGRIWKHLPSRUWDQFHRIWKH%LEOHLQ
413 U.S. at 745 n. 7 (emphasis added). Equally, in Johnson,             DOO DUHDV RI WKHLU OLYHV DUH H[SHFWHG WR DWWHQG %LEOH
this Court declined to resolve whether a very similar type of           FRXUVHVDQGFKDSHORQDGDLO\EDVLVDQGVXUURXQGHGE\DQ
tax-exempt revenue bond issue amounts to a direct benefit               HQYLURQPHQWWKRURXJKO\VDWXUDWHGE\&KXUFKHVRI&KULVW
because it held that the religious academy was not a                    GRFWULQH7KHVFKRROGRHVQRWIROORZWKH 6WDWHPHQWRI
pervasively sectarian educational institution. 241 F.3d at 511,         3ULQFLSOHVRQ$FDGHPLF)UHHGRPRIWKH$$83DQGWKH
n. 3. However, unlike those cases in which the institutions             VHFWLRQ RI WKH IDFXOW\ KDQGERRN GHDOLQJ ZLWK UHVHDUFK
were found not to be pervasively sectarian, the issue must be           VWDWHVWKDWWKHSULPDU\DLPRIHYHU\LQVWUXFWRUVKRXOGEH
directly confronted here because Lipscomb is an institution in          WRJLYHVXSHULRUDFDGHPLFLQVWUXFWLRQHPSKDVL]LQJGDLO\
which religion is so pervasive that a substantial portion of its        LQVWUXFWLRQLQWKH%LEOH/LSVFRPE
V%RDUGRI'LUHFWRUV
functions is subsumed in the religious mission so as to                 ZKLFK FRQWUROV DOO  PDMRU GHFLVLRQV RI WKH VFKRRO
suggest that the state aid to Lipscomb has the primary effect           FRQWDLQV RQO\ PHPEHUV RI WKH &KXUFK RI &KULVW
of advancing religion.                                                  &KULVWLDQHGXFDWLRQLVRQHRIWKHWKUHHSULQFLSDOGXWLHVRI
                                                                        WKH SUHVLGHQW RI WKH VFKRRO ,Q WKLV HQYLURQPHQW WKH
   ,Q GHFLGLQJ WKLV TXHVWLRQ LW LV DGYLVDEOH WR PDNH VRPH     FKDQFH WKDW UHOLJLRQ ZRXOG VHHS LQWR WKH WHDFKLQJ RI
SUHOLPLQDU\ REVHUYDWLRQV  )LUVW although the majority             VHFXODUVXEMHFWVDVGLVFXVVHGLQ5RHPHU86DW
opinion correctly notes that this precise issue has not been            6&WDWVHHPVLQHYLWDEOH
addressed by other circuits or by the Supreme Court, it
inaccurately states that all the state courts that have addressed     ,G DW  LQWHUQDO FLWDWLRQV RPLWWHG  $FFRUGLQJO\ WKH
the issue "have found that the issuance of industrial revenue         GLVWULFWFRXUWIRXQGWKDW/LSVFRPE8QLYHUVLW\LVDSHUYDVLYHO\
bonds is not tantamount to the giving of direct aid to religious      VHFWDULDQLQVWLWXWLRQ
schools." Opn. at n. 2. However, with the exception of the
Virginia Supreme Court’s decision in Lynn, 538 S.E.2d at                7KHYLWDOLW\RIWKHSHUYDVLYHO\VHFWDULDQWHVWLVTXHVWLRQDEOH
682, none of the cases cited by the majority has addressed the        LQ OLJKW RI VXEVHTXHQW PRUH UHFHQW GHFLVLRQV IURP WKH
precise question at hand, namely, ZKHWKHUWD[H[HPSWERQG             6XSUHPH&RXUW,Q0LWFKHOOY+HOPV86
ILQDQFLQJ WR D SHUYDVLYHO\ VHFWDULDQ HGXFDWLRQDO LQVWLWXWLRQ    VL[ RI QLQH -XVWLFHV UHMHFWHG DQ (VWDEOLVKPHQW &ODXVH
FRQVWLWXWHG D IRUP RI GLUHFW VWDWH DLG KDYLQJ WKH SULPDU\   FKDOOHQJH WR ORDQV RI HGXFDWLRQDO PDWHULDOV GLUHFWO\ WR
HIIHFWRIDGYDQFLQJUHOLJLRQLQYLRODWLRQRIWKH(VWDEOLVKPHQW       SDURFKLDOVFKRROV-XVWLFH6RXWHUSRLQWHGRXWLQKLVGLVVHQWLQJ
&ODXVH,QGHHGDVQRWHGE\WKH&DOLIRUQLD6XSUHPH&RXUWLQ          RSLQLRQWKDW³>1@RRQHLQGHHGGLVSXWHVWKDWWKH5RPDQ
&DOLI(GXF)DFLOLWLHV$XWKY3ULHVW3GQ        &DWKROLFVFKRROVZKLFKPDGHXSWKHPDMRULW\RIWKHSULYDWH
&DORQHRIWKHFDVHVFLWHGE\WKHPDMRULW\               VFKRROVSDUWLFLSDWLQJZHUHSHUYDVLYHO\VHFWDULDQ´,QKLV
                                                                      SOXUDOLW\RSLQLRQ-XVWLFH7KRPDVUHVSRQGHGE\VWDWLQJWKDW
  2IFRXUVHLIWKH$XWKRULW\ZHUHWRH[HUFLVHLWVSRZHUVLQ
  DLGRIDQLQVWLWXWLRQZKLFKLVSHUYDVLYHO\VHFWDULDQZLWKLQ           >7@KHGLVVHQWLVFRUUHFWWKDWWKHUHZDVDSHULRGRIWLPH
                                                                        ZKHQWKLVIDFWRUPDWWHUHGSDUWLFXODUO\LIWKHSHUYDVLYHO\
    6WHHOHHWDOY,QGXVWULDO                  1RV        1RV                  6WHHOHHWDOY,QGXVWULDO   
      'HY%GHWDO                                                                 'HY%GHWDO

  VHFWDULDQVFKRROZDVDSULPDU\RUVHFRQGDU\VFKRRO%XW               The issuance of tax-exempt revenue bonds in this case
  WKDWSHULRGLVRQHWKDWWKH&RXUWVKRXOGUHJUHWDQGLWLV             constitutes direct aid within the meaning of the
  WKDQNIXOO\ORQJSDVW´                                               Establishment Clause
,G DW   -XVWLFH 7KRPDV ZHQW RQ WR QRWH WKDW WKH            Given that Lipscomb is a pervasively sectarian educational
SHUYDVLYHO\ VHFWDULDQ DQDO\VLV ³ERUQ RI ELJRWU\ VKRXOG EH       institution, it thus must be determined whether the issuance of
EXULHGQRZ´,GDW                                               the tax-exempt revenue bonds is a direct or indirect benefit
                                                                         for Establishment Clause purposes. In this regard, it should
  <HW0LWFKHOOLVDSOXUDOLW\RSLQLRQ7KXVWKHGLVWULFWFRXUW       be noted that because Hunt found that the Baptist College at
DQGWKLV&RXUWDUHVWLOOERXQGE\SUH0LWFKHOOODZZLWKUHJDUG          Charleston was not a sectarian educational institution, it did
WR WKH SHUYDVLYHO\ VHFWDULDQ GRFWULQH  $V WKH GLVWULFW FRXUW   not need to decide the issue whether the issuance of the
FRUUHFWO\QRWHG                                                         revenue bonds constituted direct state aid in that case. In a
                                                                         footnote, though, the Court in Hunt remarked:
  ,WLVZHOOVHWWOHGWKDWLQDSOXUDOLW\RSLQLRQWKHKROGLQJ
  RI WKH &RXUW PD\ EH YLHZHG DV WKDW SRVLWLRQ WDNHQ E\              The ‘state aid’ involved in this case is of a very special
  WKRVH0HPEHUVZKRFRQFXUUHGLQWKHMXGJPHQWVRQWKH                      sort. We have here no expenditure of public funds, either
  QDUURZHVWJURXQGV&RHY%HOO)GWK                 by grant or loan, no reimbursement by a State for
  &LU  TXRWLQJ 0DUNV Y 8QLWHG 6WDWHV  86             expenditures made by a parochial school or college, and
  VHHDOVR/DNHZRRGY3ODLQ'HDOHU                    no extending or committing of a State’s credit. Rather,
  3XEOLVKLQJ&R86IQ5HHVH                  the only state aid consists, not of financial assistance
  Y&LW\RI&ROXPEXV)GWK&LU                   directly or indirectly which would implicate public funds
  ,Q0LWFKHOOWKHUHLVQRVLQJOHSDUWRIDQ\RSLQLRQWKDW                 or credit, but the creation of an instrumentality (the
  FRPPDQGVWKHVXSSRUWRIDPDMRULW\RIWKH&RXUW$VD
  UHVXOW WKH RQO\ ELQGLQJ SUHFHGHQW RI 0LWFKHOO LV WKH            Authority) through which educational institutions may
  KROGLQJ6HH,JRU.LUPDQ1RWH6WDQGLQJ$SDUWWREH$                  borrow funds on the basis of their own credit and the
  3DUW 7KH 3UHFHQGHQWLDO 9DOXH RI 6XSUHPH &RXUW                     security of their own property upon more favorable
  &RQFXUULQJ2SLQLRQV&ROXP/5HY                     interest terms than otherwise would be available. The
   .HQ .LPXUD $ /HJLWLPDF\ 0RGHO IRU WKH                    Supreme Court of New Jersey characterized the
  ,QWHUSUHWDWLRQRI3OXUDOLW\'HFLVLRQV&RUQHOO/5HY                assistance rendered an educational institution under an
                                                       act generally similar to the South Carolina Act as merely
                                                                           being a ‘governmental service.’ Clayton v. Kervick, 56
6WHHOH)6XSSGDWSDUDOOHOFLWDWLRQVRPLWWHG              N.J. 523, 530-531, 267 A.2d 503, 506-507 (1970). The
                                                                           South Carolina Supreme Court, in the opinion below,
  )XUWKHUWKH6XSUHPH&RXUWKDVVSHFLILFDOO\VWDWHGWKDWWKH              described the role of the State as that of a "mere conduit."
ORZHUFRXUWVDUHWRWUHDWLWVSULRUFDVHVDVFRQWUROOLQJXQWLOWKH         258 S.Ct., at 107, 187 S.E.2d, at 650. Because we
6XSUHPH&RXUWLWVHOIVSHFLILFDOO\RYHUUXOHVWKHP$JRVWLQLY             conclude that the primary effect of the assistance
)HOWRQ86,QUHDIILUPLQJLWVSULRU               afforded here is neither to advance nor to inhibit religion
PDQGDWHWKH&RXUWQRWHGLQ$JRVWLQLWKDW³LIDSUHFHGHQWRI               under Lemon and Tilton, we need not decide whether, as
WKLV&RXUWKDVGLUHFWDSSOLFDWLRQLQDFDVH\HWDSSHDUVWRUHVW          appellees argue, Brief for Appellees 14, the importance
RQUHDVRQVUHMHFWHGLQVRPHRWKHUOLQHRIGHFLVLRQVWKH&RXUW             of the tax exemption in the South Carolina scheme brings
    6WHHOHHWDOY,QGXVWULDO               1RV      1RV                     6WHHOHHWDOY,QGXVWULDO      
      'HY%GHWDO                                                               'HY%GHWDO

  encourages faculty to "pursue truth . . . by research,            RI$SSHDOVVKRXOGIROORZWKHFDVHZKLFKGLUHFWO\ FRQWUROV
  discussion, and other forms of inquiry." Nonetheless,             OHDYLQJ WR WKLV &RXUW WKH SUHURJDWLYH RI RYHUUXOLQJ LWV RZQ
  Regent prohibits faculty from using "their position or            GHFLVLRQV´  ,G FLWLQJ 5RGULJXH] GH 4XLMDV Y
  classroom as a platform to demand adherence by students           6KHDUVRQ$PHULFDQ([SUHVV,QF86
  to a personal theological viewpoint, political preference         ,W LV IRU WKH 6XSUHPH &RXUW QRW WKLV &RXUW WR MHWWLVRQ WKH
  or social agenda." The SACS in a review of Regent’s               SHUYDVLYHO\VHFWDULDQWHVWZKLFKLWKDVQRWGRQH
  accreditation application in 1998 found that "[f]aculty
  and students are free to examine all pertinent data,                5HJDUGOHVVRIZKHWKHUWKHSHUYDVLYHO\VHFWDULDQWHVWLVVWLOO
  question assumptions, be guided by the evidence of                WKH ODZ ZH FRQFOXGH WKDW JLYHQ WKH QDWXUH RI WKH DLG LQ
  scholarly research, and teach and study the substance of          TXHVWLRQ WKH LVVXH RI WKH ERQGV GRHV QRW RIIHQG WKH
  a given discipline." With respect to its curriculum, each         (VWDEOLVKPHQW&ODXVH
  faculty member at Regent is required to include in the
  syllabus for each class a "description of how the                 %1DWXUHRIWKH,QVWLWXWLRQ5HFHLYLQJWKH$LG
  Christian faith and the Bible will be incorporated into the
  course."                                                            7KHSUHFLVHW\SHRIDLGDWLVVXHLQWKLVDSSHDOLVYLUWXDOO\
                                                                    LGHQWLFDO WR WKH ERQGLQJ PHFKDQLVPV LQYROYHG LQ +XQW Y
Id. at 617-18.                                                      0F1DLU867KH6XSUHPH&RXUWGHVFULEHG
                                                                    WKHSURJUDPDVIROORZV
   Like Regent, the "supreme purpose" of Lipscomb is to
promote Christian ideals. Both Lipscomb and Regent also               7KHVWDWHDLGLQYROYHGLQWKLVFDVHLVRIDYHU\VSHFLDO
require applicants to submit a recommendation from a                  VRUW:HKDYHKHUHQRH[SHQGLWXUHRISXEOLFIXQGVHLWKHU
member of the clergy, without specifying the denomination.            E\ JUDQW RU ORDQ QR UHLPEXUVHPHQW E\ D 6WDWH IRU
However, unlike Regent, nearly three-quarters of the students         H[SHQGLWXUHVPDGHE\DSDURFKLDOVFKRRORUFROOHJHDQG
                                                                      QRH[WHQGLQJRUFRPPLWWLQJRID6WDWH
VFUHGLW5DWKHU
at Lipscomb are identified with a particular creed, the               WKH RQO\ VWDWH DLG FRQVLVWV QRW RI ILQDQFLDO DVVLVWDQFH
Churches of Christ. Further, in contrast to Regent, which             GLUHFWO\RULQGLUHFWO\ZKLFKZRXOGLPSOLFDWHSXEOLFIXQGV
encourages, but does not require, its students to attend chapel       RU FUHGLW EXW WKH FUHDWLRQ RI DQ LQVWUXPHQWDOLW\ WKH
services or to participate in certain religious activities, daily     $XWKRULW\WKURXJKZKLFKHGXFDWLRQDOLQVWLWXWLRQV PD\
Bible class and chapel attendance are mandatory at Lipscomb.          ERUURZ IXQGV RQ WKH EDVLV RI WKHLU RZQ FUHGLW DQG WKH
In addition, while both schools require its faculty to adhere to      VHFXULW\ RI WKHLU RZQ SURSHUW\ XSRQ PRUH IDYRUDEOH
religious principles and to incorporate the Bible into class          LQWHUHVWWHUPVWKDQRWKHUZLVHZRXOGEHDYDLODEOH7KH
instruction, Regent provides much greater latitude in terms of        6XSUHPH &RXUW RI 1HZ -HUVH\ FKDUDFWHUL]HG WKH
academic freedom than Lipscomb. Thus, even among                      DVVLVWDQFHUHQGHUHGDQHGXFDWLRQDOLQVWLWXWLRQXQGHUDQ
pervasively sectarian religious institutions, Lipscomb clearly        DFWJHQHUDOO\VLPLODUWRWKH6RXWK&DUROLQD$FWDVPHUHO\
stands out as unrelentingly sectarian in its policies and             EHLQJ D JRYHUQPHQWDO VHUYLFH  7KH 6RXWK &DUROLQD
practices.                                                            6XSUHPH&RXUWLQWKHRSLQLRQEHORZGHVFULEHGWKHUROH
                                                                      RIWKH6WDWHDVWKDWRIDPHUHFRQGXLW
                                                                    +XQW86DWQ
    6WHHOHHWDOY,QGXVWULDO                 1RV       1RV                  6WHHOHHWDOY,QGXVWULDO   
      'HY%GHWDO                                                               'HY%GHWDO

  7KLV SDVVDJH ZRXOG VHHP WR LQGLFDWH WKDW D SXEOLF ERG\        Vision--Our vision, through our graduates and other
FRXOG VHUYH DV D FRQGXLW WR DOORZ D SHUYDVLYHO\ VHFWDULDQ       scholarly activities, is to provide Christian leadership in
LQVWLWXWLRQWRUHFHLYHWKHEHQHILWVRIWD[IUHHERQGVVRORQJDV         transforming society by affirming and teaching principles
SXEOLF IXQGV ZHUH QRW H[SHQGHG  5DWKHU WKDQ UHDFK VXFK         of truth, justice and love as described in the Holy
FRQFOXVLRQKRZHYHUWKH6XSUHPH&RXUWLQVWHDGIRXQGWKDW                Scriptures, embodied in the person of Jesus Christ, and
WKHVFKRROVDWLVVXHZHUHQRWLQIDFWSHUYDVLYHO\VHFWDULDQ            enabled through the power of the Holy Spirit.
DQGIRXQGLWXQQHFHVVDU\WRDGGUHVVWKHSUHFLVHLVVXHEHIRUH
WKLV&RXUW6LQFH+XQWWKH6XSUHPH&RXUWKDVQRWDGGUHVVHG           Id. In spite of its religious mission, Regent does not have any
WKHLVVXH                                                             "specific religious requirement for student admissions, and
                                                                       "the lack of such a ‘[Christian] commitment’ does not
  0RUHUHFHQWO\LQ-RKQVRQY(FRQRPLF'HYHORSPHQW&RUS             negatively impact an applicant’s standing for admission." Id.
)GWK&LUWKLV&RXUWFRQVLGHUHGDFDVH             at 686. However, the Virginia Supreme Court noted that
LQYROYLQJIDFWVVLPLODUWR+XQWVXSUD,Q-RKQVRQDSULYDWH         "[a]ll applicants are required to submit a ‘Clergy
&DWKROLF VFKRRO DSSOLHG IRU DQG ZDV JUDQWHG DQ LQGXVWULDO      Recommendation,’ both as a matter of policy and practice.
UHYHQXH ERQG IURP WKH 0LFKLJDQ (FRQRPLF 'HYHORSPHQW              Among the questions asked is whether the applicant has
&RUSRUDWLRQDQDJHQF\RIWKH6WDWHRI0LFKLJDQ7KLV&RXUW           ‘made a meaningful personal commitment to Jesus Christ.’"
KHOGWKDWWKHVFKRRODOWKRXJKD5RPDQ&DWKROLFLQVWLWXWLRQ           Id. The Virginia Supreme Court in Lynn further remarked:
ZDVQRWDSHUYDVLYHO\VHFWDULDQLQVWLWXWLRQ,GDW
                                                                            Although encouraged to do so, students are not
  %HFDXVHRIWKLVFRQFOXVLRQWKH&RXUWGLGQRWUHVROYHWKH              required to attend Regent’s weekly corporate chapel
TXHVWLRQRIZKHWKHUWKHJUDQWLQJRIDQLQGXVWULDOUHYHQXHERQG           services or participate in any particular religious
WR D SHUYDVLYHO\ VHFWDULDQ LQVWLWXWLRQ LV DQ XQFRQVWLWXWLRQDO     activities. However, they must have "[p]ersonal goals
IRUPRIDLG7KH-RKQVRQ&RXUWGLGQRWHKRZHYHUWKDW                 consistent with the mission and goals of Regent
  >,@WLVIDUIURPVHWWOHGWKDWWKHW\SHRIDLGDWLVVXHLQWKLV         University," and must submit a "[p]ersonal goals
  FDVHLVGLUHFWDLGZLWKLQWKHPHDQLQJRIWKH(VWDEOLVKPHQW             statement" addressing how their "personal and spiritual
  &ODXVHMXULVGLFWLRQ                                                 objectives" relate to Regent’s "Christ-centered
                                                                         educational philosophy." The instructions explain that
,GDW                                                              "for the Christian, [a goal] is a statement of faith in God's
                                                                         will for his or her life."
  0RUHRYHU WKH &RXUW DOVR PDGH WKH IROORZLQJ
  REVHUYDWLRQ                                                              Faculty, unlike students, are required to sign a
                                                                         document indicating their adherence to the "Statement of
  3ODLQWLIIFODLPVWKDWWKHWD[H[HPSWLRQXQGHUWKH('&                  Faith." They are "strongly encouraged but they're not
  $FWLVWKHHTXLYDOHQWRIDWD[VXEVLG\IRUSXUSRVHVRIWKH             required" to attend chapel. The faculty is required to
  (VWDEOLVKPHQW &ODXVH     7KH 6XSUHPH &RXUW KDV            integrate "faith and learning." Dr. Selig testified, and the
  H[SUHVVO\ UHMHFWHG WKH DUJXPHQW ³7KHUH LV D                     SACS (Southern Association of Colleges and Schools)
  FRQVWLWXWLRQDOO\VLJQLILFDQWGLIIHUHQFHEHWZHHQVXEVLGLHV              and the ABA (American Bar Association) agree, that the
  DQGWD[H[HPSWLRQV´&DPSV1HZIRXQG2ZDWRQQD,QF                    Statement of Faith has not interfered with academic
  Y7RZQRI+DUULVRQ86	QFLWLQJ                 freedom. Regent’s detailed academic freedom policy
   6WHHOHHWDOY,QGXVWULDO              1RV    1RV                       6WHHOHHWDOY,QGXVWULDO   
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institution for Establishment Clause purposes. As noted by        :DO]  86 >@  >@  7KH GLIIHUHQFH
the Virginia Supreme Court in Lynn,                               EHWZHHQVXEVLGLHVDQGWD[H[HPSWLRQVLVWKDWLQJLYLQJ
                                                                  WD[H[HPSWLRQV³WKHJRYHUQPHQWGRHVQRWWUDQVIHUSDUWRI
  Regent’s Articles of Incorporation, provide that:               LWVUHYHQXHEXWVLPSO\DEVWDLQVIURPGHPDQGLQJWKH
                                                                  >HQWLW\@ VXSSRUW WKH VWDWH´  :DO]  86 DW 
    [Regent] shall exist for the purpose of bringing glory        7KHUHIRUHWKHEHQHILWSURYLGHGE\WKHWD[H[HPSWVWDWXV
  to God and His Son Jesus Christ by providing an                 RIWKHERQGVGRHVQRWDPRXQWWRDFDVKVXEVLG\
  institution or institutions of learning in which those who
  are mature in the knowledge of God and His ways can           ,GDWSDUDOOHOFLWDWLRQVRPLWWHG
  assist and guide, in a spirit of free inquiry and scholarly
  excellence, those who would learn of Him, His ways, and          -XGJH 1HOVRQ LQ D FRQFXUULQJ RSLQLRQ ZDV HYHQ PRUH
  His creation, while together they study ways to glorify       GLUHFWDQGFRQFOXGHGWKDWFRQGXLWILQDQFLQJLQWKHIRUPRIDQ
  God and better their world.                                   LQGXVWULDO UHYHQXH ERQG GRHV QRW RIIHQG WKH (VWDEOLVKPHQW
                                                                &ODXVH HYHQ LI WKH EHQHILWWLQJ LQVWLWXWLRQ LV SHUYDVLYHO\
538 S.E.2d at 685. Lynn also noted that Regent has adopted      VHFWDULDQ,GDW+HFRQFOXGHGWKDWWKHW\SHRIDLGLQ
a Statement of Faith that provides,                             TXHVWLRQZDVQRGLIIHUHQWWKDQWKHLQGLUHFWDLGSURYLGHGE\
                                                                SURSHUW\WD[H[HPSWLRQVDYDLODEOHWRUHOLJLRXVLQVWLWXWLRQVDQG
  Regent University is a Christ-centered institution. The       H[SUHVVO\DSSURYHGE\WKH6XSUHPH&RXUWLQ:DO]LQIUD,G
  Board of Trustees, along with the faculty and staff of the    DW
  university, are committed to an evangelical interpretation
  and application of the Christian faith. The campus              ,Q WKH FDVH DW EDU WKH %RDUG SURYLGHV SDVVWKURXJK RU
  community is closely identified with the present-day          FRQGXLWILQDQFLQJVHUYLFHVWRDZLGHYDULHW\RIQRQUHOLJLRXV
  renewal movement, which emphasizes the gifts, fruit and       DQG UHOLJLRXV QRQSURILW RUJDQL]DWLRQV  7KH %RDUG KDV
  ministries of the Holy Spirit. It is expected that all        DUUDQJHGWD[H[HPSWILQDQFLQJIRUH[DPSOHIRUDQXPEHURI
  trustees, officers, administrators and faculty will           FROOHJHV DQG XQLYHUVLWLHV ZLWK DQG ZLWKRXW D UHOLJLRXV
  subscribe to this statement in writing[.]                     DIILOLDWLRQDVZHOODVIRUORZLQFRPHKRXVLQJSURMHFWVWKH
                                                                &RXQWU\ 0XVLF +DOO RI )DPH WKH (DVWHU 6HDO 6RFLHW\
Id. Regent’s Mission Statement provides:                        UHWLUHPHQWFHQWHUVWKH-HZLVK&RPPXQLW\&HQWHUWKH<RXQJ
                                                                0HQV &KULVWLDQ $VVRFLDWLRQ DQG 1DVKYLOOH 3XEOLF 5DGLR
  Preamble--Regent University is a graduate institution         &RFKUDQ$IIDW3UHVVQHOO$IIDW	([%)XUWKHU
  that exists to bring glory to God the Father and His Son      VLPLODUFRQGXLWILQDQFLQJKDVEHHQSURYLGHGWRDQXPEHURI
  Jesus Christ through the work of the Holy Spirit.             SULYDWHO\ RZQHG GHYHORSPHQW SURMHFWV  6LJQLILFDQWO\ QR
                                                                FODLPLVPDGHWKDWWKH%RDUGHYHUIDYRUHGRUGLVIDYRUHGRQH
  Mission--Our mission is to provide an exemplary               UHOLJLRQRYHUDQRWKHU
  graduate education from biblical perspectives to aspiring
  servant leaders in pivotal professions and to be a leading
  center of Christian thought and action.                           
                                                                     7KH &RXUW QRWHV WKDW &RQJUHVV KDV DFWHG WR OLPLW WKH QXPEHU RI
                                                                ERQGV LVVXHG E\ VWDWH DQG ORFDO JRYHUQPHQW 7KH 7D[ (TXLW\ DQG )LVFDO
                                                                5HVSRQVLELOLW\ $FW RI  3XE / 1R     6WDW 
                                                                   FRGLILHG DW ,5&  E
           6WHHOHHWDOY,QGXVWULDO                              1RV       1RV                 6WHHOHHWDOY,QGXVWULDO   
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&1DWXUHRIWKH$LG                                                                       Columbia Union Coll. v. Oliver, 254 F.3d 496 (4th Cir. 2001)
                                                                                           ("Columbia Union II"). In Columbia Union II, the Fourth
  /LSVFRPE 8QLYHUVLW\ FRQWHQGV WKDW WKH ERQGV UHSUHVHQW                              Circuit stated:
LQGLUHFWDLGRIWKHW\SHWKH6XSUHPH&RXWXSKHOGLQ:DO]Y
7D[&RPPLVVLRQ867KH:DO]&RXUWKHOG                                       The district court respected fully the majority’s order
WKDWDVWDWXWHZKLFKSURYLGHGDWD[H[HPSWLRQIRUUHDOHVWDWH                                of remand in Columbia Union I. Working through the
RZQHG E\ UHOLJLRXV RUJDQL]DWLRQV GLG QRW UHSUHVHQW DQ                                 four factors in this case, the court found that although
XQFRQVWLWXWLRQDOJRYHUQPHQWDODWWHPSWWRHVWDEOLVKVSRQVRU                                 Columbia Union had a mandatory worship policy, it
RUVXSSRUWUHOLJLRQ,QODQJXDJHSHUWLQHQWWRWKLVDSSHDOWKH                              applied only to a minority of students. With regard to the
6XSUHPH&RXUWQRWHG                                                                         second factor, the court held that the evidence submitted
                                                                                             by the Commission was insufficient to show that the
   7KHJUDQWRIDWD[H[HPSWLRQLVQRWVSRQVRUVKLSVLQFHWKH                                 traditional liberal arts classes were "taught with the
   JRYHUQPHQW GRHV QRW WUDQVIHU SDUW RI LWV UHYHQXHV WR                              primary objective of religious indoctrination." The court
   FKXUFKHVEXWVLPSO\DEVWDLQVIURPGHPDQGLQJWKDWWKH                                      pointed to "affirmative evidence indicating that secular
   FKXUFKVXSSRUWWKHVWDWH                                                               education is the primary goal of" Columbia Union. The
,GDW7KH6XSUHPH&RXUWFRQFOXGHGWKDW³>W@KHUHLVQR                                 court examined the college’s mission statement and the
JHQXLQHQH[XVEHWZHHQWD[H[HPSWLRQDQGHVWDEOLVKPHQWRI                                     descriptions of secular curricula in the college’s catalog,
UHOLJLRQ´,G                                                                              among other things, in making this finding. The court
                                                                                             looked at the college’s syllabi for secular courses and
   6XEVHTXHQWO\ WKH &RXUW PDGH FOHDU WKDW DQ LQGLUHFW                                determined that the religious references were too isolated
ILQDQFLDOEHQHILWFRQIHUUHGE\DUHOLJLRXVO\QHXWUDOWD[GRHV                                and scattered to justify a finding that religion permeates
QRWJLYHULVHWRDQ(VWDEOLVKPHQW&ODXVHYLRODWLRQ,Q0XHOOHU                              the secular courses. And although the court found that
Y $OOHQ  86   WKH &RXUW XSKHOG D WD[                              the Seventh-day Adventist Church exerted a dominance
GHGXFWLRQIRUDPRXQWVSDLGDVVFKRROWXLWLRQWH[WERRNVDQG                                over college affairs and that the college gave an express
WUDQVSRUWDWLRQ  7KH &RXUW DFNQRZOHGJHG WKDW ³UHOLJLRXV                               preference in hiring and admissions to members of the
                                                                                             Church, these factors by themselves were not enough to
                                                                                             make the college a pervasively sectarian one.
                                                                                          Id. at 508-09. In contrast to Columbia Union College,
         7KH &RXUW IRXQG VLJQLILFDQW WKDW WKHVH GHGXFWLRQV ZHUH DPRQJ PDQ\

GHGXFWLRQV DOORZHG XQGHU 0LQQHVRWD ODZ                   )RU H[DPSOH WKH &RXUW IRXQG     Lipscomb has a mandatory worship policy and imparts
WKDW
                                                                                           instruction with the primary objective of religious
        'HGXFWLRQV IRU FKDULWDEOH FRQWULEXWLRQV DOORZHG E\ 0LQQHVRWD
                                                                                           indoctrination. Lipscomb also places religious restrictions on
        ODZ 0LQQ 6WDW   VXEG   LQFOXGH FRQWULEXWLRQV
                                                                                           admission and expressly hires faculty and staff based upon
        WR UHOLJLRXV LQVWLWXWLRQV DQG H[HPSWLRQV IURP SURSHUW\ WD[ IRU                    membership in the Churches of Christ.
        SURSHUW\   XVHG     IRU    FKDULWDEOH   SXUSRVHV    XQGHU    0LQQHVRWD      ODZ

        LQFOXGH SURSHUW\ XVHG IRU ZKROO\ UHOLJLRXV SXUSRVHV                         Indeed, Lipscomb is even more pervasively sectarian than
        ,Q   HDFK FDVH LW PD\ EH WKDW UHOLJLRXV LQVWLWXWLRQV EHQHILW               YHU\
                                                                                           Regent University ("Regent"), the only other institution that
                     :DO]
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        KROGLQJ LQ           Y 7D[ &RPP
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                                                                                           has been found by a court to be a pervasively sectarian
        KRZHYHU     WKDW   WKLV   GRHV   QRW   UHTXLUH   WKH   FRQFOXVLRQ   WKDW   VXFK
   6WHHOHHWDOY,QGXVWULDO                1RV     1RV                                     6WHHOHHWDOY,QGXVWULDO                  
     'HY%GHWDO                                                                               'HY%GHWDO

  Moreover, there are no religious requirements for                LQVWLWXWLRQVEHQHILWYHU\VXEVWDQWLDOO\IURPWKHDOORZDQFH´RI
  membership on the Academy's Board of Trustees.                   WKLVNLQGRIWD[GHGXFWLRQ,GDWQ7KH&RXUWIRXQG
  Non-Catholics have served, and currently serve, on the           WKDWERWKSDUHQWVDQGSDURFKLDOVFKRROVUHFHLYHGDEHQHILWDQG
  Board.                                                           WKHDVVLVWDQFH³XOWLPDWHO\KDVDQHFRQRPLFHIIHFWFRPSDUDEOH
                                                                   WR WKDW RI DLG JLYHQ GLUHFWO\ WR WKH VFKRROV DWWHQGHG E\ WKH
     In addition, the Academy does not discriminate on the         FKLOGUHQ´,GDW,UUHVSHFWLYHRIWKLVEHQHILWWKH&RXUW
  basis of race, color, creed, or national origin in its           DFNQRZOHGJHGLWVGHFLVLRQV³FRQVLVWHQWO\KDYHUHFRJQL]HGWKDW
  admissions process, nor does it give preference in               WUDGLWLRQDOO\µ>OHJLVODWXUHV@KDYHHVSHFLDOO\EURDGODWLWXGHLQ
  admission to Roman Catholics. Furthermore, the                   FUHDWLQJFODVVLILFDWLRQVDQGGLVWLQFWLRQVLQWD[VWDWXWHV¶5HJDQ
  Academy does not discriminate on the basis of race,              Y7D[DWLRQ:LWK5HSUHVHQWDWLRQRI:DVK86
  color, or national origin in any of its educational policies,    LQSDUWEHFDXVHWKHµIDPLOLDULW\ZLWKORFDOFRQGLWLRQV¶
  scholarship and loan programs, athletic or extracurricular       HQMR\HGE\OHJLVODWRUVHVSHFLDOO\HQDEOHVWKHPWRµDFKLHYHDQ
  activities, or other-school administered programs. As of         HTXLWDEOH GLVWULEXWLRQ RI WKH WD[ EXUGHQ¶´  0DGGHQ Y
  the date of the issuance of the bonds at issue, 135 of the       .HQWXFN\  86     ,G DW   7KXV D
  366 (non-preschool) students at the Academy, or 37%,             UHOLJLRXVVFKRRO¶VUHFHLSWRILQGLUHFWEHQHILWVWKURXJKDWD[
  were not Catholic. And as of the date of the stipulation,        GHGXFWLRQ ³GRHV QRW UHTXLUH WKH FRQFOXVLRQ WKDW VXFK
  34% of the students were not Catholic. The facts                 SURYLVLRQV RI D VWDWH¶V WD[ ODZ YLRODWH WKH (VWDEOLVKPHQW
  indicate that faiths represented in the Academy student          &ODXVH´,GDW$VORQJDVWKHWD[EHQHILWLVQHXWUDOO\
  body include non-Catholic Christian, Jewish, Islamic,            DYDLODEOHWKH(VWDEOLVKPHQW&ODXVHLVQRWYLRODWHG
  Shinto and others. Finally, the Academy does not
  discriminate on the basis of race, color, creed or national        7KH RQO\ HYLGHQFH RI  UHFRUG LV WKDW VLPLODU ERQGV KDYH
  origin in the hiring of its employees. The Academy has           EHHQLVVXHGWRERWKUHOLJLRXVDQGQRQUHOLJLRXVLQVWLWXWLRQVLQ
  a teaching faculty of 60, of whom five are members of            DQHXWUDOPDQQHU7KHILQDQFLQJLQTXHVWLRQKDVEHHQPDGH
  religious orders. There is no religious-affiliation              DYDLODEOH WR FROOHJHV DQG XQLYHUVLWLHV LQ 0HWUR DV ZHOO DV
  requirement or preference for the Academy's teachers,
  and the school does not inquire as to the religious
  affiliation of prospective faculty members.                            SURYLVLRQV RI D 6WDWH
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Johnson, 241 F.3d at 516-17. Most striking, Lipscomb,              0XHOOHU     86 DW  DQG Q


unlike the academy in Johnson, interjects religion into                  
virtually all aspects of its institutional life. Further, unlike            7KH   0XHOOHU   FRXUW IRXQG WKDW ³>0@RVW LPSRUWDQWO\ WKH GHGXFWLRQ LV


the school in Johnson, Lipscomb reserves the right under           DYDLODEOH IRU HGXFDWLRQDO H[SHQVHV LQFXUUHG E\ DOO SDUHQWV LQFOXGLQJ WKRVH

                                                                   ZKRVH     FKLOGUHQ    DWWHQG   SXEOLF    VFKRROV     DQG    WKRVH   ZKRVH     FKLOGUHQ     DWWHQG
Title VII of the Civil Rights Act of 1964 to discriminate in       QRQVHFWDULDQ      SULYDWH    VFKRROV    RU   VHFWDULDQ      SULYDWH    VFKRROV´    7KH    &RXUW

the hiring of faculty and staff on the basis of religion.          DQDORJL]HG      WR   :LGPDU Y 9LQFHQW              86             ZKHUH     LW

                                                                   ³FRQFOXGHG WKDW WKH 6WDWH
V           SURYLVLRQ RI D IRUXP QHXWUDOO\ µDYDLODEOH WR D


  Lipscomb is also distinguishable from Columbia Union             EURDG FODVV RI QRQUHOLJLRXV DV ZHOO DV UHOLJLRXV VSHDNHUV¶ GRHV QRW µFRQIHU


College, the educational institution affiliated with the           DQ\   LPSULPDWXU      RI    VWDWH   DSSURYDO¶´      7KH    &RXUW      FRQFOXGHG   WKDW    ³KHUH



Seventh Day Adventist Church that the Fourth Circuit did not       µ>WKH@    SURYLVLRQ    RI   EHQHILWV

                                                                   LPSRUWDQW LQGH[ RI VHFXODU HIIHFW¶´
                                                                                                           WR   VR   EURDG

                                                                                                                     0HXOOHU
                                                                                                                               D   VSHFWUXP     RI

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regard as a pervasively sectarian educational institution. See           :H DGGUHVV WKH QHXWUDOLW\ LVVXH              LQIUD
    6WHHOHHWDOY,QGXVWULDO                  1RV        1RV                 6WHHOHHWDOY,QGXVWULDO   
      'HY%GHWDO                                                                'HY%GHWDO

WKURXJKRXW 7HQQHVVHH DQG WKH 8QLWHG 6WDWHV DQG KDV EHHQ         educational institutions that the Supreme Court has found not
SURYLGHG WR D QXPEHU RI FROOHJHV DQG XQLYHUVLWLHV ZLWK           to be pervasively sectarian.
GLIIHUHQWNLQGVRIUHOLJLRXVDIILOLDWLRQVDQGWKRVHZLWKRXWDQ\
UHOLJLRXVDIILOLDWLRQ                                                     It should also be noted that Lipscomb is markedly different
                                                                         from the religious academy in Johnson that this Court found
   ,Q0XHOOHUWKH6XSUHPH&RXUWGLVWLQJXLVKHGLWVKROGLQJLQ            not to be pervasively sectarian. In Johnson, this Court
1\TXLVW Y &RPPLWWHH IRU 3XEOLF (GXFDWLRQ DQG 5HOLJLRXV           described the religious academy in the following terms:
/LEHUW\86,Q1\TXLVWWKHVWDWHOHJLVODWLRQ
DW LVVXH LQFOXGHG D ZLGH UDQJH RI JRYHUQPHQW ILQDQFLDO                As to the nature of the institution, as with any
DVVLVWDQFH LQ DLG RI SULYDWH SUHGRPLQDWHO\ SDURFKLDO                religiously affiliated school, the Academy pledges its
HGXFDWLRQ6WDWHPRQH\ZDVGLUHFWHGIRUPDLQWHQDQFH DQG                  allegiance to its faith. Nevertheless, the facts establish
UHSDLURISULYDWHVFKRROV,QDGGLWLRQWKHOHJLVODWLRQSURYLGHG          that the Academy is not a pervasively sectarian
IRUERWKGLUHFWWXLWLRQJUDQWVDQGWD[FUHGLWVSD\DEOHWRSDUHQWV          institution. The Academy’s Restated Articles of
ZKRVH FKLOGUHQ DWWHQGHG SULYDWH VFKRROV  ,Q 0XHOOHU WKH          Incorporation provide that the school’s purpose is to
&RXUW QRWHG WKDW WKH RXWULJKW JUDQWV LQ 1\TXLVW ZHUH               "conduct an independent Catholic school from pre-school
IXQGDPHQWDOO\ GLIIHUHQW IURP WD[ GHGXFWLRQV JLYHQ WR DOO            through and including the 12th grade, wherein the arts
SDUHQWVRISXEOLFDQGSULYDWHVFKRROVWXGHQWVIRUHGXFDWLRQ                and sciences, and other forms of primary and secondary
UHODWHGH[SHQVHV86DWQ)XUWKHUXQOLNHWKH               learning are taught, and diplomas and honors therein
GHGXFWLRQVDSSURYHGLQ0XHOOHUWKHGHGXFWLRQVDWLVVXHLQ                 conferred: while maintaining a philosophy consonant
1\TXLVWZHUHQRWEDVHGRQDFWXDOH[SHQVHVLQFXUUHG,QVWHDG              with that of the network of the Sacred Heart schools of
WKHGHGXFWLEOHDPRXQWVZHUHHVWLPDWHGDQGGHVLJQHGWRHTXDO                which it is a member." (J.A. at 66.) The Academy’s
WKHGROODUDPRXQWRIWKHGLUHFWDLGLQWKHIRUPRIWXLWLRQJUDQWV          curriculum and requirements provides that
DYDLODEOH RQO\ WR ORZ LQFRPH IDPLOLHV  ,G  7KH &RXUW
FRQFOXGHGWKDWWKHVHJUDQWVGLGQRWWDNHWKHIRUPRIRUGLQDU\                [e]very student at [the Academy] receives intensive
WD[EHQHILWVDQGFRQVWLWXWHGGLUHFWDLGWRUHOLJLRXVVFKRROV                training in the basic academic skills of English,
                                                                             Mathematics, History, Foreign Language and
  ,Q+HUQDQGH]Y&RPPLVVLRQHURI,QWHUQDO5HYHQXH                      Science. Art, Music, Drama, Forensics, Theology
86    WKH &RXUW KHOG SURYLVLRQV RI WKH              and Computer Science are essential parts of this
,QWHUQDO5HYHQXH&RGHSHUPLWWLQJIHGHUDOWD[SD\HUVWRGHGXFW                 program. [The Academy] offers each student a full
JLIWV RU FRQWULEXWLRQV PDGH WR D YDULHW\ RI FKDULWDEOH               Physical Education Program designed to develop a
RUJDQL]DWLRQV LQFOXGLQJ SXUHO\ UHOLJLRXV JURXSV GLG QRW               sense of sportsmanship, a respect for physical fitness
YLRODWHWKH(VWDEOLVKPHQW&ODXVH,Q+HUQDQGH]PHPEHUVRI                  and an awareness of the enjoyment derived from
WKH &KXUFK RI 6FLHQWRORJ\ FRQWHQGHG WKDW WKH )LUVW                    athletic endeavors.
$PHQGPHQW SUHYHQWHG WKH ,56 IURP GHHPLQJ REOLJDWRU\
SD\PHQWVIRUDWWHQGDQFHRI³DXGLWLQJVHVVLRQV´DVVRPHWKLQJ                (J.A. at 154.) A review of the course descriptions and the
RWKHU WKDQ D FKDULWDEOH FRQWULEXWLRQ  ,G DW   7KH ,56     subjects covered for each of the courses offered at the
FRQWHQGHG WKDW D PDQGDWRU\ SD\PHQW WR WKH FKXUFK IRU               Academy, with the exception of the Religion
DXGLWLQJDQGWUDLQLQJZDVQRWDJLIWEXWUDWKHUDTXLGSURTXR            Department, demonstrates that the Academy does not
SD\PHQWIRUVHUYLFHVUHFHLYHGDQGWKHUHIRUHQRWGHGXFWDEOH                interject religion into every aspect of its curriculum.
   6WHHOHHWDOY,QGXVWULDO               1RV      1RV                  6WHHOHHWDOY,QGXVWULDO   
     'HY%GHWDO                                                            'HY%GHWDO

institution based upon the fact that it did not impose religious   7KH&KXUFKRI6FLHQWRORJ\FRQWHQGHGWKDWWKHGLVDOORZDQFH
qualifications on its faculty and staff and given that the         RI VXFK SD\PHQWV DV FKDULWDEOH GHGXFWLRQV YLRODWHG WKH
percentage of the student body roughly reflected the same          (VWDEOLVKPHQW &ODXVH LQWHU DOLD E\ FUHDWLQJ H[FHVVLYH
percentage of Baptists in the area. Unlike the college in Hunt,    HQWDQJOHPHQWEHWZHHQFKXUFKDQGVWDWH7KH6XSUHPH&RXUW
which did not hire faculty on the basis of religion, apart from    IRXQGQRH[FHVVLYHHQWDQJOHPHQWDQGLQODQJXDJHSHUWLQHQW
those teaching in the theology departments, Lipscomb               WRWKHLVVXHEHIRUHWKLV&RXUWVWDWHGWKDW³URXWLQHUHJXODWRU\
requires that its faculty be members in good standing of the       LQWHUDFWLRQZKLFKLQYROYHVQRLQTXLULHVLQWRUHOLJLRXVGRFWULQH
Churches of Christ. Further, the fact that the student body at     QRGHOHJDWLRQRIVWDWHSRZHUWRDUHOLJLRXVERG\DQG
Lipscomb is largely affiliated with the Churches of Christ         QR µGHWDLOHG PRQLWRULQJ DQG FORVH DGPLQLVWUDWLYH FRQWDFW¶
reflects Lipscomb’s placement of religious restrictions on         EHWZHHQVHFXODUDQGUHOLJLRXVERGLHVGRHVQRWRILWVHOI
student admissions.                                                YLRODWH WKH QRQHQWDQJOHPHQW FRPPDQG´  ,G  DW 
                                                                   LQWHUQDOFLWDWLRQVRPLWWHG
   Lipscomb is also clearly distinguishable from the Roman
Catholic colleges in Roemer, which were "characterized by a           0RVWUHFHQWO\LQ=HOPDQY6LPPRQV+DUULV86DW
high degree of institutional autonomy" from "their formal          BBB  WKH 6XSUHPH &RXUW DJDLQ GLVWLQJXLVKHG LWV
affiliation with the Roman Catholic Church." Roemer, 426           KROGLQJLQ1\TXLVW7KH=HOPDQ&RXUWIRXQGWKDWWKHVFKRRO
U.S. at 755. By contrast, Lipscomb’s "supreme purpose" is          YRXFKHUSURJUDPLQ2KLRGLGQRWYLRODWHWKH(VWDEOLVKPHQW
"to teach the Bible as the revealed will of God to man and as      &ODXVH7KH&RXUWIRXQGWKDWWKHSURJUDPZDVFRQWUROOHGE\
the only and sufficient rule of faith and practice, and to train   LWVKROGLQJVLQ0XHOOHU:LWWHUVDQG=REUHVW$VWR1\TXLVW
those who will attend in a pure Bible Christianity." Further,      WKH&RXUWKHOG
unlike the colleges in Roemer, Lipscomb does not subscribe
to the AAUP’s Statement of Principles on Academic                    7RWKHH[WHQWWKHVFRSHRI1\TXLVWKDVUHPDLQHGDQRSHQ
Freedom. Moreover, unlike the colleges in Roemer, where              TXHVWLRQLQOLJKWRIWKHVHODWHUGHFLVLRQVZHQRZKROG
attendance at religious exercises was not required and where         WKDW 1\TXLVW GRHV QRW JRYHUQ QHXWUDO HGXFDWLRQDO
spiritual development was encouraged as a "secondary                 DVVLVWDQFHSURJUDPVWKDWOLNHWKHSURJUDPKHUHRIIHUDLG
objective," Lipscomb requires attendance at religious service,       GLUHFWO\WRDEURDGFODVVRILQGLYLGXDOUHFLSLHQWVGHILQHG
placing those who fail to attend on "chapel probation," and          ZLWKRXWUHJDUGWRUHOLJLRQ
clearly promotes spiritual development as the primary              =REUHVW86DWBBB
objective of the institution. While the colleges in Roemer
gave mandatory religion and theology courses taught                  ,Q D FRQFXUULQJ RSLQLRQ LQ =HOPDQ -XVWLFH 2¶&RQQRU
"primarily by Roman Catholic clerics," those courses only          H[SODLQHGWKDWDJRYHUQPHQWSURJUDPLVQRWFRQVWLWXWLRQDOO\
supplemented "a curriculum covering ‘the spectrum of a             LQILUPVROHO\EHFDXVHDVXVWDQWLDOEHQHILWLVFRQIHUUHGRQD
liberal arts program.’" Roemer, 426 U.S. at 756. In contrast,      UHOLJLRXV RUJDQL]DWLRQ   86 DW BBB 2¶&RQQRU -
the Bible classes at Lipscomb are central to the mission of the    FRQFXUUHQFH6KHH[SODLQHG
school, and the failure to pass a Bible course results in a
student being placed on "Bible probation," which subjects the        $OWKRXJK  PLOOLRQ LV QR VPDOO VXP LW SDOHV LQ
student to dismissal from the school if he or she does not pass      FRPSDULVRQWRWKHDPRXQWRIIXQGVWKDWIHGHUDOVWDWHDQG
every Bible course taken while on Bible probation. Lipscomb          ORFDOJRYHUQPHQWVDOUHDG\SURYLGHUHOLJLRXVLQVWLWXWLRQV
thus clearly stands separate and apart from the higher
    6WHHOHHWDOY,QGXVWULDO               1RV      1RV                  6WHHOHHWDOY,QGXVWULDO   
      'HY%GHWDO                                                            'HY%GHWDO

  5HOLJLRXVRUJDQL]DWLRQVPD\TXDOLI\IRUH[HPSWLRQVIURP             these four institutions requires its students to attend
  WKH IHGHUDO FRUSRUDWH LQFRPH WD[ VHH  86&              religious services. Although all four schools require their
   F WKH FRUSRUDWH LQFRPH WD[ LQ PDQ\ 6WDWHV       students to take theology courses, the parties stipulated
  VHHHJ&DO5HY	7D[&RGH$QQG:HVW                 that these courses are taught according to the academic
  DQGSURSHUW\WD[HVLQDOO6WDWHVVHH.7XUQHU          requirements of the subject matter and the teacher's
  3URSHUW\ 7D[ ([HPSWLRQV IRU 1RQSURILWV 2FW                concept of professional standards. The parties also
  3UREDWHDQG3URSHUW\DQGFOHUJ\TXDOLI\IRUD            stipulated that the courses covered a range of human
  IHGHUDOWD[EUHDNRQLQFRPHXVHGIRUKRXVLQJH[SHQVHV              religious experiences and are not limited to courses about
   86&  D  ,Q DGGLWLRQ WKH )HGHUDO           the Roman Catholic religion. The schools introduced
  *RYHUQPHQW SURYLGHV LQGLYLGXDOV FRUSRUDWLRQV WUXVWV          evidence that they made no attempt to indoctrinate
  DQGHVWDWHVDWD[GHGXFWLRQIRUFKDULWDEOHFRQWULEXWLRQVWR         students or to proselytize. Indeed, some of the required
  TXDOLILHGUHOLJLRXVJURXSV6HHF)LQDOO\           theology courses at Albertus Magnus and Sacred Heart
  WKH)HGHUDO*RYHUQPHQWDQGFHUWDLQVWDWHJRYHUQPHQWV                are taught by rabbis. Finally, as we have noted, these
  SURYLGH WD[ FUHGLWV IRU HGXFDWLRQDO H[SHQVHV PDQ\ RI        four schools subscribe to a well-established set of
  ZKLFKDUHVSHQWRQHGXFDWLRQDWUHOLJLRXVVFKRROV6HH            principles of academic freedom, and nothing in this
  HJ  $ +RSH WD[ FUHGLW 0LQQ6WDW          record shows that these principles are not in fact
  6XSS                                                        followed. In short, the evidence shows institutions with
                                                                      admittedly religious functions but whose predominant
  0RVWRIWKHVHWD[SROLFLHVDUHZHOOHVWDEOLVKHGVHHHJ         higher education mission is to provide their students with
  0XHOOHU Y $OOHQ  86    XSKROGLQJ           a secular education.
  0LQQHVRWDWD[GHGXFWLRQIRUHGXFDWLRQDOH[SHQVHV:DO]
  Y7D[&RPP
QRI&LW\RI1HZ<RUN86            Id. at 686-687. Unlike Tilton, where the theology courses at
  XSKROGLQJDQH[HPSWLRQIRUUHOLJLRXVRUJDQL]DWLRQVIURP          the colleges affiliated with the Roman Catholic Church were
  1HZ<RUNSURSHUW\WD[\HWFRQIHUDVLJQLILFDQWUHODWLYH         "taught according to the academic requirements and the
  EHQHILWRQUHOLJLRXVLQVWLWXWLRQV7KHVWDWHSURSHUW\WD[         teacher’s concept of professional standards," without
  H[HPSWLRQV IRU UHOLJLRXV LQVWLWXWLRQV DORQH DPRXQW WR       attempting "to indoctrinate students or to proselytize," the
  YHU\ODUJHVXPVDQQXDOO\                                         religion classes at Lipscomb are Bible classes, not theology
,GSDUDOOHOFLWDWLRQVRPLWWHG                                  classes. At Lipscomb, Bible classes are taught as "the
                                                                    revealed will of God to man and as the only and sufficient
  6LPLODU WR WKH EHQHILWV DW LVVXH LQ :DO] 0XHOOHU        rule of faith and practice, and to train those who will attend in
+HUQDQGH]DQGQRZ=HOPDQWKHERQGVDWLVVXHLQWKLVFDVH         a pure Bible Christianity, excluding from the faith all
DUHDQDORJRXVWRDQLQGLUHFWILQDQFLDOEHQHILWFRQIHUUHGE\D       opinions and philosophies of men, and from the work and
UHOLJLRXVO\QHXWUDOWD[RUGHGXFWLRQ                               worship of the church of God all human inventions and
                                                                    devices," except those that "will aid in the understanding and
'0HWKRGE\:KLFKWKH$LGLV,VVXHG                               teaching of the Scriptures."
   7KHPHWKRGE\ZKLFKWKHWD[H[HPSWERQGVDUHWREHLVVXHG         Lipscomb also clearly differs from the Baptist college in
WR/LSVFRPE8QLYHUVLW\LVVLJQLILFDQW$Q\LQVWLWXWLRQVHHNLQJ     Hunt. As already noted, the Baptist College at Charleston
D WD[ H[HPSW ERQG PXVW DUUDQJH WKH ILQDQFLQJ E\ ORFDWLQJ   was not found to be a pervasively sectarian educational
    6WHHOHHWDOY,QGXVWULDO               1RV      1RV                  6WHHOHHWDOY,QGXVWULDO   
      'HY%GHWDO                                                            'HY%GHWDO

testimony that Lipscomb instructs the faculty in the Biology        H[FOXVLYHO\SULYDWHOHQGHUVRIWKHIXQGV7KHSXUFKDVHURID
and Physics Departments to "teach creationism." By                  ERQGKDVUHFRXUVHIRUUHSD\PHQWDJDLQVW/LSVFRPE8QLYHUVLW\
Lipscomb’s own admission, the religious tenets of the               RQO\WKHKROGHURIDERQGKDVQRUHFRXUVHDJDLQVWWKH%RDUG
Churches of Christ are designed to permeate every facet of the      RU0HWURLQWKHHYHQWRIQRQSD\PHQW1RJRYHUQPHQWIXQGV
University, including classroom instruction in subjects that        DUHLQYROYHGLQWKHHQWLUHWUDQVDFWLRQ7KHLQWHUHVWSDLGWRWKH
are considered non-religious or nonsectarian.                       ERQGKROGHUVE\/LSVFRPE8QLYHUVLW\LVQRWVXEMHFWWRIHGHUDO
                                                                    VWDWHRUORFDOLQFRPHWD[HV6LQFHWKHERQGVDUHWD[H[HPSW
  Here, the record shows that Lipscomb satisfies all the            /LSVFRPE8QLYHUVLW\UHDSVWKHEHQHILWRIDORZHULQWHUHVWUDWH
elements of a sectarian educational institution profile,            WKDQWKDWSDLGWRDOHQGHUSD\LQJLQFRPHWD[HVRQWKHLQWHUHVW
conclusively demonstrating that religion pervades it to such        UHFHLYHG2QO\E\WKHSRWHQWLDOORVVRIWD[UHYHQXHGRHVWKH
an extent that "its functions are subsumed in the religious         FRQGXLWILQDQFLQJLQYROYHDQ\LPSDFWRQSXEOLFIXQGV
mission." Hunt, 413 U.S. at 743. Accordingly, there is no
genuine issue of material fact about whether Lipscomb is a             ,QLWLDOO\ZHQRWHWKDWDJRYHUQPHQWDOERG\PXVWLVVXHWKH
pervasively sectarian educational institution.                      ERQGV  :KLOH DW ILUVW EOXVK VXFK IDFW ZRXOG LQGLFDWH
                                                                    JRYHUQPHQWDO HQGRUVHPHQW RI UHOLJLRQ WKH UHDVRQ IRU WKH
Lipscomb is clearly distinguishable from educational                LVVXDQFHRIWKHERQGVE\DJRYHUQPHQWDODJHQF\VWHPVIURP
institutions found not to be pervasively sectarian                  WKHVLPSOHIDFWWKDWWKH,QWHUQDO5HYHQXH&RGHH[FOXGHVIURP
                                                                    LQFRPHWD[DWLRQRQO\LQWHUHVWSDLGRQLQGXVWULDOUHYHQXHERQGV
   As an educational institution, Lipscomb is clearly               LVVXHGDQGDSSURYHGE\DVWDWHRUORFDOJRYHUQPHQWDOXQLW
distinguishable from those higher educational institutions that     86&  I$  6XFK TXDOLI\LQJ ERQGV QHHG QRW
the Supreme Court has found not to be pervasively sectarian.        ILQDQFH D JRYHUQPHQWDO IXQFWLRQ VXFK DV ZDWHU RU VHZHU
For example, in Tilton v. Richardson, 403 U.S. 672 (1971),          OLQHVEXWPD\EHLVVXHGWRSURPRWHDYDULHW\RISXUSRVHV
the Supreme Court found that a direct federal grant awarded         LQFOXGLQJ HFRQRPLF GHYHORSPHQW DQG KLJKHU HGXFDWLRQ
pursuant to the Higher Education Facilities Act of 1963 to          )XUWKHU 7HQQHVVHH ODZ UHTXLUHV VXFK ERQGV VHUYH WKH
four colleges and universities affiliated with the Roman            ³IXUWKHUDQFHRIWKHHGXFDWLRQDOSXUSRVHVRIVXFKLQVWLWXWLRQ
Catholic Church for the construction of academic facilities         LQFOXGLQJEXWQRWOLPLWHGWRFODVVURRPODERUDWRU\KRXVLQJ
devoted to secular purposes did not violate the Establishment       DGPLQLVWUDWLYHSK\VLFDOHGXFDWLRQDQGPHGLFDOUHVHDUFKDQG
Clause, except for the section of the Act that limited federal      WUHDWPHQW IDFLOLWLHV´  7HQQ &RGH $QQ  
interest in the facilities to a period of twenty years because it   $YLL
allowed the unconstitutional contribution of valuable property
to a religious institution, and could be "used to promote              7KH IHGHUDO JRYHUQPHQW KDV FRQWLQXRXVO\ SURYLGHG DQ
religious interests." 403 U.S. at 683. The colleges in Tilton       H[HPSWLRQIRULQWHUHVWRQERQGVLVVXHGE\RURQEHKDOIRI
were described in the following terms:                              VWDWHVDQGORFDOLWLHVVLQFHWKHLQFHSWLRQRIDIHGHUDOLQFRPH
                                                                    WD[LQ7DULII$FWRI3XE/1RFK
  All four schools are governed by Catholic religious               6WDW$OWKRXJKVWDWHVDQGORFDOLWLHVILUVWWRRNDGYDQWDJH
  organizations, and the faculties and student bodies at            RIWKLVH[FHSWLRQE\LVVXLQJJHQHUDOREOLJDWLRQERQGVWKH\
  each are predominantly Catholic. Nevertheless, the                ODWHULVVXHGUHYHQXHERQGVWRKHOSILQDQFHSULYDWHEXVLQHVV
  evidence shows that non-Catholics were admitted as                DFWLYLWLHVIRUWKHRVWHQVLEOHSXUSRVHRISURPRWLQJHFRQRPLF
  students and given faculty appointments. Not one of               JURZWK  6WXDUW & -RKQVRQ 0XOWL)DPLO\ +RXVLQJ %RQGV
       6WHHOHHWDOY,QGXVWULDO                            1RV           1RV                  6WHHOHHWDOY,QGXVWULDO   
         'HY%GHWDO                                                                              'HY%GHWDO

&DQWKH7D[&RGH3URYLGHDQ(IILFLHQWDQG(IIHFWLYH/RZ                                 Gospels, The Church, Old Testament, and Defense of the
,QFRPH +RXVLQJ 3URJUDP  9D 7D[ 5HY                                Faith. According to Lipscomb, the Bible is the inspired word
 FLWDWLRQV RPLWWHG &RQJUHVV SURYLGHG IRU DQ                               of God, and students are encouraged to apply Biblical
H[HPSWLRQIURPLQFRPHWD[DWLRQIRULQGXVWULDOUHYHQXHERQGV                              principles in conducting the affairs of their personal and
LVVXHGLQFRQQHFWLRQZLWKDSURMHFWLQWHQGHGWREHQHILWDORFDO                          professional lives. Students are also required to pass Bible
HFRQRP\  7KH ,QWHUQDO 5HYHQXH 6HUYLFH H[SOLFLWO\                                  courses, and the failure to do so results in being placed on
OHJLWLPL]HGWKLVSUDFWLFHLQ5HY5XO                              "Bible probation," which could lead to expulsion. From 1988
&%6XFKERQGVKDYHEHHQW\SLFDOO\LVVXHGE\D                             to 1992, approximately 100 students were placed on Bible
JRYHUQPHQWDODXWKRULW\HYHQWKRXJKVXFKDXWKRULW\GRHVQRW                              probation. In addition, students are required to attend chapel
DFWXDOO\ ERUURZ WKH IXQGV QRU LV VXFK DXWKRULW\ OLDEOH IRU                      every school day, and the failure to do so may lead to being
UHSD\PHQW  ³$ UHYHQXH ERQG LV UHSDLG VROHO\ IURP WKH                           placed on "chapel probation."
UHYHQXHV JHQHUDWHG E\ WKH IDFLOLWLHV FRQVWUXFWHG ZLWK ERQG
SURFHHGV,QWKHLVVXDQFHRIWKLVW\SHRIERQGWKHSROLWLFDO                             Fourth, attendance at chapel and the study of the Bible at
VXEGLYLVLRQDFWVVROHO\DVDFRQGXLWIRULVVXLQJWKHERQGV,W                          Lipscomb are an "integral part" of the religious mission of the
KDV QR REOLJDWLRQ WR XVH LWV WD[ UHYHQXHV WR ILQDQFH DQ\                       Churches of Christ. This is made clear repeatedly throughout
VKRUWIDOO´=LPPHUPDQ/LPLWLQJWKH*URZWKRI7D[([HPSW                                Lipscomb’s Faculty and Student Handbooks, as well as its
,QGXVWULDO 'HYHORSPHQW %RQGV $Q (FRQRPLF (YDOXDWLRQV                               university catalogues.
&RQJ5HVHDUFK6HUY5HS1R(
                                                                                            Fifth, religious indoctrination is a "substantial purpose" at
   ,QDGGLWLRQE\UHTXLULQJORFDOJRYHUQPHQWDODXWKRULWLHVWR                           Lipscomb. As set forth in Lipscomb’s corporate charter and
LVVXH WD[H[HPSW LQGXVWULDO UHYHQXH ERQGV &RQJUHVV                                 bylaws of the Board of Directors, "[t]he corporation was
GHOHJDWHGWRVXFKJRYHUQPHQWDOXQLWVDQHOHPHQWRIFRQWURO                               organized for the purpose of teaching the word of God and the
RYHUORFDOHFRQRPLFGHYHORSPHQW7KHUHYHQXHERQGVVHUYH                                various branches of the useful knowledge, commonly taught
DVDPHDQVRIILQDQFLQJ ORFDOSUHIHUHQFHV6HH&OD\WRQ3                              in institutions of learning for the following general purpose:
*LOOHWWH)LVFDO)HGHUDOLVPDQGWKH8VHRI0XQLFLSDO%RQG                                . . . the support of public worship, the building of churches
3URFHHGV1<8/5HYGLVFXVVLQJ6HFWLRQ                              and chapels and the maintenance of missionary undertakings."
RIWKH,QWHUQDO5HYHQXH&RGHZKLFKSURYLGHVDIHGHUDO                               Moreover, as the district court noted, "[t]he land on which the
WD[ H[HPSWLRQ IRU LQWHUHVW HDUQHG RQ VWDWH DQG PXQLFLSDO                         construction projects funded by the bond proceeds were
                                                                                         undertaken is subject to restrictive covenants that require that
                                                                                         the property be used exclusively to further the religious
                                                                                         mission of the institution so long as the property is owned by
                                                                                         Lipscomb." Steele v. Indus. Dev. Bd. of the Metro. Gov. of
                                                                                         Nashville and Davidson County, 117 F.Supp.2d 693, 710
                                                                                        (M.D. Tenn. 2000).
      7KH   6HUYLFH   FODVVLILHG   DV   WD[   H[HPSW   WKRVH   ERQGV   LVVXHG   E\   D

PXQLFLSDOLW\ WR ILQDQFH FRQVWUXFWLRQ RI SULYDWHO\ XVHG LQGXVWULDO SODQWV

QRWZLWKVWDQGLQJ WKH SXUSRVH IRU ZKLFK WKH\ ZHUH LVVXHG RU WKH IDFW WKDW                   Sixth, Lipscomb imposes religious restrictions on how and
WKH SURPLVH WR SD\ LV OLPLWHG WR WKH UHYHQXH WR EH GHULYHG IURP OHDVLQJ WKH              what the faculty teach. As Lipscomb acknowledges, it does
SURSHUW\ WR EH DFTXLUHG    ,W LV QRW QHFHVVDU\    WKDW WKH REOLJDWLRQ EH
D JHQHUDO RQH SOHGJLQJ WKH JHQHUDO FUHGLW RI WKH PXQLFLSDOLW\ RU WKH XVH RI
                                                                                         not subscribe to the AAUP’s Statement of Principles on
LWV WD[LQJ SRZHU                                                                       Academic Freedom. Specifically, there was unrebutted
    6WHHOHHWDOY,QGXVWULDO               1RV       1RV                         6WHHOHHWDOY,QGXVWULDO         
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Lipscomb fits the profile of a pervasively sectarian                 ERQGV)RUH[DPSOHDORFDOJRYHUQPHQWPLJKWFRQFOXGH
educational institution                                              WKDW WKH LVVXDQFH RI DQ LQGXVWULDO UHYHQXH ERQG WR D QHZ
                                                                     EXVLQHVVFRXOGJLYHDFRPSHWLWLYHGLVDGYDQWDJHWRDQH[LVWLQJ
   Viewing the undisputed facts, the district court properly         EXVLQHVVZKLFKKDGQRWUHFHLYHGVXFKFRQGXLWILQDQFLQJDQG
concluded that Lipscomb is, as a matter of law, a pervasively        UHVXOWLQHFRQRPLFGLVSODFHPHQWUDWKHUWKDQGHYHORSPHQW
sectarian educational institution. First, the record indicates
that Lipscomb places religious restrictions on admission, and           ,WLVFOHDUIURPWKHUHFRUGWKDWLQGXVWULDOUHYHQXHERQGVDUH
that more than 70% of the student body belongs to the                LVVXHGWRDZLGHYDULHW\RIEXVLQHVVHVVFKRROVXQLYHUVLWLHV
Churches of Christ. Lipscomb also places religious                   FKDULWLHVDQGRWKHURUJDQL]DWLRQV,WLVZLWKRXWTXHVWLRQWKDW
restrictions on faculty and staff appointments, requiring that       D UHOLJLRXV RUJDQL]DWLRQ PD\ UHFHLYH ³JHQHUDO JRYHUQPHQW
all personnel, with limited exceptions, be members in good           EHQHILWV´FRQVLVWHQWZLWKWKH(VWDEOLVKPHQW&ODXVH=REUHVW
standing of the Churches of Christ. Specifically, all members        Y&DWDOLQD)RRWKLOOV6FK'LVW86$VWKH
of Lipscomb’s faculty and staff are expected to attend daily         6XSUHPH&RXUWQRWHGLQ:LGPHUY9LQFHQW86
chapel and adhere to church doctrines. Further, faculty                 ³,I WKH (VWDEOLVKPHQW &ODXVH EDUUHG WKH
members are contractually bound to promote the beliefs of the        H[WHQVLRQRIJHQHUDOEHQHILWV WRUHOLJLRXVJURXSVµDFKXUFK
Churches of Christ, both in and out of the classroom, and if         FRXOGQRWEHSURWHFWHGE\WKHSROLFHDQGILUHGHSDUWPHQWVRU
any member leaves the church, it is an immediate ground for          KDYHLWVSXEOLFVLGHZDONNHSWLQUHSDLU¶´FLWLQJ5RHPHUY%G
termination of employment. As noted by the district court,           RI3XE:RUNV86:HFRQFOXGHWKDW
Lipscomb also reserves the right under Title VII of the Civil        WKH LVVXDQFH RI WD[ H[HPSW ERQGV RQ D QHXWUDO EDVLV LV WKH
Rights Act of 1964 (as amended) to discriminate, "where it is        FRQIHUHQFHRIDJHQHUDOO\DYDLODEOHJRYHUQPHQWDOEHQHILW
necessitated by the specific religious tenets held by the
institution."
   Second, Lipscomb enforces obedience to its religious
dogma, directing that the Bible be taught "every school day
to every student enrolled . . . by teachers who are sound in the
faith and faithful in their lives to its sacred truths." According       
                                                                           $FFRUGLQJ WR WKH 6HQDWH &RPPLWWHH RQ )LQDQFH 6 5HS 1R 
to Lipscomb, its "supreme purpose" is "to teach the Bible as         WK &RQJ G 6HVV   WKH SXEOLF QRWLFH DQG DSSURYDO
the revealed will of God to man and as the only and sufficient       UHTXLUHPHQWV ZHUH HQDFWHG WR KHOS HOLPLQDWH LQDSSURSULDWH XVHV RI WD[
rule of faith and practice, and to train those who will attend in    H[HPSW ILQDQFLQJ DQG WR KHOS UHVWRUH WKH EHQHILW RI WD[H[HPSW ILQDQFLQJ
a pure Bible Christianity."                                          IRU WUDGLWLRQDO JRYHUQPHQWDO SXUSRVHV :KLOH DFNQRZOHGJLQJ WKDW VWDWH
                                                                     DQG ORFDO JRYHUQPHQWV DUH EHVW VXLWHG WR GHWHUPLQH WKH DSSURSULDWH XVHV
                                                                     RI LQGXVWULDO GHYHORSPHQWV ERQGV WKH FRPPLWWHH FRQFOXGHG WKDW LQGXVWULDO
  Third, Lipscomb requires its students to participate in daily      GHYHORSPHQW ERQGV VHUYH D OHJLWLPDWH SXUSRVHV RQO\ LI D WKH DIIHFWHG
Bible study and attendance at chapel. According to                   SXEOLF KDV DQ RSSRUWXQLW\ WR FRPPHQW RQ WKH XVH RI WD[H[HPSW ILQDQFLQJ
Lipscomb, "[t]he university has no authority to suspend [the         IRU SDUWLFXODU IDFLOLWLHV DQG E DIWHU WKDW LQSXW WKH HOHFWHG UHSUHVHQWDWLYHV
daily Bible] requirement for any student." As the district           RI WKH JRYHUQPHQWDO XQLW GHWHUPLQH WKDW WKHUH ZLOO EH VXEVWDQWLDO SXEOLF
court found, all students must take at least one Bible class         EHQHILW IURP LVVXLQJ WKH ERQGV +5 &RQI 5HS 1R  WK &RQJ G
                                                                     6HVV    &%  %DVHG RQ WKLV OHJLVODWLYH KLVWRU\
every day of each semester and are required to take at least         0HWUR KDV FOHDUO\ IXOILOOHG LWV REOLJDWLRQ XQGHU  I WR DSSURYH D ERQG
one course from each of the following four categories: The           LVVXH WKDW PHHWV WKH SXEOLF FULWHULD
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     'HY%GHWDO                                                              'HY%GHWDO

(3ULPDU\3XUSRVHDQG(IIHFWRIWKH3URJUDP                         Circuit identified four "general areas of inquiry" in
                                                                      determining whether a school is pervasively sectarian:
  ,QKHUFRQFXUUHQFHLQ=HOPDQ-XVWLFH2¶&RQQRUUHDIILUPHG           "(1) does the college mandate religious worship; (2) to what
WKDWWKHPRGLILHG/HPRQ7HVWLVVWLOODFHQWUDOWRROLQDQDO\VLV      extent do religious influences dominate the academic
RI(VWDEOLVKPHQW&ODXVHFDVHVQRWLQJ                                 curriculum, (3) how much do religious preferences shape the
                                                                      college’s faculty hiring and student admission processes, and
  $VRULJLQDOO\IRUPXODWHGDVWDWXWHSDVVHGWKLVWHVWRQO\LI        (4) to what degree does the college enjoy ‘institutional
  LWKDGDVHFXODUOHJLVODWLYHSXUSRVHLILWVSULQFLSDORU        autonomy’ apart from the church with which it is affiliated."
  SULPDU\ HIIHFW ZDV RQH WKDW QHLWKHU DGYDQFH>G@ QRU         Id. at 163. Although the Fourth Circuit asserted that a college
  LQKLELW>HG@UHOLJLRQDQGLILWGLGQRWIRVWHUDQH[FHVVLYH       is not pervasively sectarian unless it possesses a "great many"
  JRYHUQPHQW HQWDQJOHPHQW ZLWK UHOLJLRQ  /HPRQ Y             of the characteristics identified in the four-factor test, 159
  .XUW]PDQ  86    LQWHUQDO              F.3d at 163, there is nothing clearly stated in prior Supreme
  TXRWDWLRQ PDUNV RPLWWHG  ,Q $JRVWLQL Y )HOWRQ        Court precedent to the effect that a pervasively sectarian
  86     ZH IROGHG WKH                 instruction must possess "a great many" of the relevant
  HQWDQJOHPHQWLQTXLU\LQWRWKHSULPDU\HIIHFWLQTXLU\7KLV          characteristics; rather, the focus of the inquiry is whether
  PDGH VHQVH EHFDXVH ERWK LQTXLULHV UHO\ RQ WKH VDPH
  HYLGHQFHVHHLELGDQGWKHGHJUHHRIHQWDQJOHPHQWKDV             religion so permeates the secular education functions
  LPSOLFDWLRQVIRUZKHWKHUDVWDWXWHDGYDQFHVRULQKLELWV             provided by a religious-affiliated educational institution that
  UHOLJLRQ VHH /\QFK Y 'RQQHOO\  86            its religious and secular educational functions are in fact
  2
&21125-FRQFXUULQJ7KHWHVWWRGD\LV                inseparable. Further, I take issue with the statement by the
  EDVLFDOO\ WKH VDPH DV WKDW VHW IRUWK LQ 6FKRRO 'LVW RI   Fourth Circuit in Columbia Union I that "because the
  $ELQJWRQ 7RZQVKLS Y 6FKHPSS  86                Supreme Court has never held any institution of higher
   FLWLQJ (YHUVRQ Y %RDUG RI (G RI (ZLQJ        education to be ‘pervasively sectarian,’ we lack even a clear
  860F*RZDQY0DU\ODQG86               ‘general picture’ of a ‘pervasively sectarian’ college or
  RYHU\HDUVDJR                                         university." 159 F.3d at 163. In my view, the general profile
                                                                      of a pervasively sectarian institution is not as difficult to
=HOPDQ  86 BBB  2¶&RQQRU - FRQFXUULQJ           discern from Supreme Court jurisprudence as the Fourth
RSLQLRQSDUDOOHOFLWDWLRQVRPLWWHG                                Circuit purports it to be. Although the Fourth Circuit
                                                                      correctly recognized that "[n]either the Supreme Court, nor
   $V WR WKH SULPDU\ SXUSRVH LQGXVWULDO UHYHQXH ERQGV         any circuit court to our knowledge, has ever found a college
DGYDQFHDFOHDUJRYHUQPHQWDOVHFXODULQWHUHVWLQSURPRWLQJ           to be pervasively sectarian," id. at 169, it is clear that the
HFRQRPLF DQG HGXFDWLRQDO GHYHORSPHQW  6XFK FRQGXLW             Supreme Court certainly left open this possibility. See Hunt,
ILQDQFLQJDOVRSURPRWHVHFRQRPLFGHYHORSPHQWWKRXJKWKH               413 U.S. at 743 (citing Tilton v. Richardson, 403 U.S. 672,
XQGHUZULWLQJ RI MRESURGXFLQJ FRQVWUXFWLRQ SURMHFWV DW           682 (1971)); see also Va. Coll. Bldg. Auth. v. Lynn, 260 Va.
FROOHJHVDQGXQLYHUVLWLHV,QWXUQDPRUHHGXFDWHGSRSXODFH         608, 538 S.E.2d 682 (Va. 2000) (applying the elements of the
LV EHWWHU SRVLWLRQHG WR JHQHUDWH QHZ GHYHORSPHQW DQG           Roemer test to find that Regent University, created under the
HFRQRPLFRSSRUWXQLW\,QDFDVHLQYROYLQJLQGXVWULDOUHYHQXH         auspices of the Christian Broadcasting Network, Inc., is a
ERQGVIRUDSULYDWHUHOLJLRXVKLJKVFKRROWKLV&RXUWKHOGLQ         pervasively sectarian institution).
-RKQVRQY(FRQRPLF'HYHORSPHQW&RUS)GDW
    6WHHOHHWDOY,QGXVWULDO               1RV      1RV                   6WHHOHHWDOY,QGXVWULDO    
      'HY%GHWDO                                                             'HY%GHWDO

sectarian," the plurality opinion in Roemer noted that it was         $VWDWH¶VGHFLVLRQWRDVVLVWEXVLQHVVHVLQWKHLURSHUDWLRQ
necessary to "paint a general picture of the institution,             LQRUGHUWRFUHDWHDQGPDLQWDLQMREV±UHJDUGOHVVRIWKH
composed of many elements." Id. at 758. Summarizing the               W\SH RI EXVLQHVVHV ± µHYLGHQFHV D SXUSRVH WKDW LV ERWK
elements of a sectarian profile set forth in the Court’s              VHFXODUDQGXQGHUVWDQGDEOH¶0XHOOHU86DW
majority opinion in Comm. for Public Educ. and Religious              0LFKLJDQ FRXOG FRQFOXGH WKDW WKHUH LV D VWURQJ SXEOLF
Liberty v. Nyquist, 413 U.S. 756, 767-68 (1973), the plurality        LQWHUHVWLQSURPRWLQJDVVLVWLQJDQGUHWDLQLQJFRPPHUFLDO
in Roemer stated:                                                     HQWHUSULVHVERWKVHFWDULDQDQGQRQVHFWDULDQ
  The elements of the "profile" were that the schools                 $VWRWKHSURJUDP¶VSULPDU\HIIHFWWD[IUHHUHYHQXHERQGV
  placed religious restrictions on admission and also               KDYHQHLWKHUWKHHIIHFWRIDGYDQFLQJRULQKLELWLQJUHOLJLRQRU
  faculty appointments; that they enforced obedience to             DV -XVWLFH 2¶&RQQRU KDV ³SXW LW RI µHQGRUV>LQJ@ RU
  religious dogma; that they required attendance at                 GLVDSSURY>LQJ@    UHOLJLRQ¶´  =HOPDQ  86 DW BBB
  religious services and the study of particular religious          2¶&RQQRU - FRQFXUUHQFH FLWLQJ /\QFK Y 'RQQHOO\ 
  doctrine; and that they were an ‘integral part’ of the            86DWFRQFXUULQJRSLQLRQ0HWUR¶VSURJUDP³DVLQ
  religious mission of the sponsoring church; that they had         0XHOOHUµ>@LVPDGHDYDLODEOHJHQHUDOO\ZLWKRXWUHJDUGWRWKH
  religious indoctrination as a ‘substantial purpose’; and          VHFWDULDQQRQVHFWDULDQ RU SXEOLFQRQSXEOLF QDWXUH RI WKH
  that they imposed religious restrictions on how and what          LQVWLWXWLRQ EHQHILWWHG¶´   =HOPDQ  86 DW BBB FLWLQJ
  the faculty could teach.                                          0XHOOHU86DW

Roemer, 426 U.S. at 753 n. 18 (citing Nyquist, 413 U.S. at            7KHHIIHFWRI0HWUR¶VSURJUDPLVHFRQRPLFDQGHGXFDWLRQDO
767-68).                                                            GHYHORSPHQW0DQ\VWDWHVDQGORFDOJRYHUQPHQWVKDYHXVHG
                                                                    LQGXVWULDO UHYHQXH ERQGV WR HQWLFH QHZ RU H[SDQGHG
   In light of the views expressed in the majority opinions in      PDQXIDFWXULQJFRPPHUFLDODQGHGXFDWLRQDOSURMHFWV7KHVH
Hunt and Nyquist, the proper starting point for evaluating the      SURMHFWV SULYDWHO\ RZQHG DUH QRW ILQDQFHG ZLWK GLUHFW
Establishment Clause challenge in this case is to adopt the         JRYHUQPHQWIXQGLQJEXWDUHJLYHQSUHIHUHQWLDOWD[WUHDWPHQW
profile for a pervasively sectarian educational institution         WKURXJKFRQGXLWILQDQFLQJ/LSVFRPE8QLYHUVLW\VHHNVWKH
stated by the plurality in Roemer, as this most closely adheres     VDPHW\SHRIILQDQFLQJIRUWKHH[SDQVLRQRILWVIDFLOLWLHVDV
to Supreme Court precedent expressed in majority opinions           FRXOG EH VRXJKW E\ :DOPDUW 6HDUV RU HGXFDWLRQDO
on this topic. See Agostini, 521 U.S. at 237 (noting that "the      LQVWLWXWLRQV  7KH /RDQ $JUHHPHQW EHWZHHQ WKH %RDUG DQG
Court of Appeals should follow the case which directly              /LSVFRPE8QLYHUVLW\VSHFLILFDOO\SURKLELWVLWIURPXVLQJDQ\
controls, leaving to this Court the prerogative of overruling its   ERQGILQDQFHGIDFLOLWLHVIRUUHOLJLRXVSXUSRVHV7KHSURMHFWV
own decisions").                                                    /LSVFRPE8QLYHUVLW\VHHNVWRILQDQFHZRXOGSURYLGHQROHVV
                                                                    HFRQRPLF GHYHORSPHQW WKDQ D QHZ VWRUH RU D QHZ
  It should be noted that this approach accords with that taken     PDQXIDFWXULQJIDFLOLW\
by the Fourth Circuit in Columbia Union Coll. v. Clarke, 159
F.3d 151 (4th Cir. 1998) ("Columbia Union I"), which                  )XUWKHU DV LQ WKH VFKRRO IXQGLQJ SURJUDP WKH 6XSUHPH
adopted a four-factor test that is essentially a restatement of     &RXUW XSKHOG LQ =HOPDQ 0HWUR¶V LQGXVWULDO UHYHQXH ERQG
the Supreme Court’s profile of a pervasively sectarian              SURJUDPGRHVQRWSUHVHQWWKHSHUFHSWLRQRIHQGRUVHPHQWWR
educational institution. In Columbia Union I, the Fourth            WKHUHDVRQDEOHREVHUYHU³µ>7@KHUHDVRQDEOHREVHUYHULQWKH
    6WHHOHHWDOY,QGXVWULDO                  1RV       1RV                  6WHHOHHWDOY,QGXVWULDO   
      'HY%GHWDO                                                                'HY%GHWDO

HQGRUVHPHQWLQTXLU\PXVWEHGHHPHGDZDUH¶RIWKHµKLVWRU\                   Aid normally may be thought to have a primary effect
DQGFRQWH[W¶XQGHUO\LQJDFKDOOHQJHGSURJUDP´=HOPDQ               of advancing religion when it flows to an institution in
86DWBBBFLWLQJ*RRG1HZV&OXEY0LOIRUG&HQWUDO6FKRRO              which religion is so pervasive that a substantial portion
86$VWKH=HOPDQ&RXUWVWDWHG                     of its functions are [sic] subsumed in the religious
                                                                          mission or when it funds a specifically religious activity
  $Q\REMHFWLYHREVHUYHUIDPLOLDUZLWKWKHIXOOKLVWRU\DQG               in an otherwise substantially secular setting.
  FRQWH[WRIWKH2KLRSURJUDPZRXOGUHDVRQDEOHO\YLHZLW
  DV RQH DVSHFW RI D EURDGHU XQGHUWDNLQJ WR DVVLVW SRRU        Id. at 743. The Court in Hunt concluded that the aid did not
  FKLOGUHQ LQ IDLOHG VFKRROV QRW DV DQ HQGRUVHPHQW RI          go to a pervasively sectarian institution, nor to fund
  UHOLJLRXVVFKRROLQJLQJHQHUDO                                       specifically religious activities, and thus would not "place the
                                                                        Authority in the position of providing aid to the religious as
=HOPDQ86DWBBB                                                opposed to the secular activities." Id. at 744. Although Hunt
                                                                        did not outline a test for identifying a pervasively sectarian
   6LPLODUO\ LQ WKH LQVWDQW FDVH WKH REMHFWLYH REVHUYHU RI    institution, the Court found that the Baptist college in
0HWUR¶VLQGXVWULDOUHYHQXHERQGSURJUDPNQRZLQJWKHKLVWRU\            question was not pervasively sectarian inasmuch as "there are
DQGFRQWH[WRIWKLVSURJUDPZRXOGUHDVRQDEO\YLHZLWDVRQH
DVSHFW RI D EURDGHU XQGHUWDNLQJ WR ILQDQFH HFRQRPLF              no religious qualifications for faculty membership or student
GHYHORSPHQWQRWDVDQHQGRUVHPHQWRIUHOLJLRXVVFKRROLQJLQ            admission, and that only 60% of the College student body is
JHQHUDO0HWURQRPRUHHQGRUVHG/LSVFRPE8QLYHUVLW\WKDQ               Baptist, a percentage roughly equivalent to the percentage of
LWGLG:DO0DUWLQLVVXLQJLQGXVWULDOUHYHQXHERQGV                    Baptists in that area of South Carolina." 413 U.S. at 743-44.

,9&21&/86,21                                                           Notwithstanding the absence in Hunt of an explicit test for
                                                                        identifying a pervasively sectarian educational institution, the
   %HFDXVHWKHSURSRVHGLVVXDQFHRILQGXVWULDOUHYHQXHERQGV            plurality opinion in Roemer v. Bd. of Public Works of Md.,
WR/LSVFRPE8QLYHUVLW\LVSDUWRIDQHXWUDOSURJUDPWREHQHILW          426 U.S. 736 (1976) set forth a profile of a pervasively
HGXFDWLRQLQFOXGLQJWKDWSURYLGHGE\VHFWDULDQLQVWLWXWLRQV           sectarian educational institution for evaluating Establishment
DQGFRQIHUVDWEHVWRQO\DQLQGLUHFWEHQHILWWRWKHVFKRROZH          Clause claims. In Roemer, the Court considered an
KROGWKDWWKHLVVXDQFHRIWKHERQGVGRHVQRWYLRODWHWKH)LUVW          Establishment Clause challenge to the constitutionality of a
$PHQGPHQW                                                              Maryland statute providing public aid in the form of grants
                                                                        ("Sellinger grants") to colleges affiliated with the Roman
  ,Q VXP WKH QDWXUH RI WKH LQVWLWXWLRQ LV QRW WKH UHOHYDQW   Catholic Church. In Roemer, the plurality noted that "the
LQTXLU\LQWKHVSHFLDOW\SHRIDLGDWLVVXHLQWKLVDSSHDO7KH        focus of the debate" concerned whether the grant program had
QDWXUHRIWKHDLGFRQIHUUHGE\WKHWD[IUHHUHYHQXHERQGVLV            the primary effect of advancing religion and creating
QRWGLUHFWDLG,QVWHDGLWLVDQDORJRXVWRDQLQGLUHFWILQDQFLDO      excessive church-state entanglement. As to the primary-effect
EHQHILW FRQIHUUHG E\ D UHOLJLRXVO\ QHXWUDO WD[ RU FKDULWDEOH    question, the plurality in Roemer noted that "Hunt requires (1)
GHGXFWLRQ DQG LV LQGLVWLQJXLVKDEOH IURP WKDW H[SUHVVO\            that no state aid at all go to institutions that are so
DSSURYHGLQ:DO]VXSUD7KHIXQGLQJYHKLFOHLVDYDLODEOHRQ          ‘pervasively sectarian’ that secular activities cannot be
DQHXWUDOEDVLV1RJRYHUQPHQWIXQGVZLOOEHH[SHQGHG1RU             separated from sectarian ones, and (2) that if secular activities
GRHVDQ\KROGHURIDERQGKDYHUHFRXUVHDJDLQVWWKH%RDUGRU            can be separated out, they alone may be funded." Id. at 755.
0HWUR LQ WKH HYHQW RI QRQSD\PHQW  7KH EHQHILW WR EH         In determining whether an institution was "pervasively
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light least favorable to the non-moving party" in granting          REWDLQHG E\ /LSVFRPE 8QLYHUVLW\ LV WKH VDPH SURYLGHG WR
summary judgment in favor of Plaintiffs. Lipscomb’s Br. at          SULYDWH FRPSDQLHV ZKLFK FUHDWH LGHQWLFDO HFRQRPLF
7, n. 4. There is no merit to this claim because the district       RSSRUWXQLWLHV  7KH FRQGXLW ILQDQFLQJ DGYDQFHV D FOHDU
court based its decision on the undisputed facts in the record,     JRYHUQPHQWDO VHFXODU LQWHUHVW LQ SURPRWLQJ HFRQRPLF
which established as a matter of law that Lipscomb is a             RSSRUWXQLW\  )LQDOO\ WKH UHYHQXH ERQG SURJUDP GRHV QRW
pervasively sectarian educational institution and that the loan     SUHVHQWWKHSHUFHSWLRQRIJRYHUQPHQWHQGRUVHPHQWRIUHOLJLRQ
transaction amounted to a direct economic benefit for
Establishment Clause purposes.                                        %DVHGRQWKHIRUHJRLQJZH5(9(56(WKHGLVWULFWFRXUW
                                                                    JUDQW RI VXPPDU\ MXGJPHQW IRU SODLQWLIIV DQG 5(9(56(
The profile of a pervasively sectarian educational                  ERWK WKH GLVWULFW FRXUW¶V GHQLDO RI VXPPDU\ MXGJPHQW IRU
institution                                                         0HWUR DQG LWV GHQLDO RI VXPPDU\ MXGJPHQW WR /LSVFRPE
                                                                    8QLYHUVLW\
  In evaluating whether Lipscomb is a pervasively sectarian
institution, our attention should be directed in the first
instance to Hunt v. McNair, 413 U.S. 734 (1973), since it is
the only case dealing with the precise issue at hand that
yielded a majority opinion. In Hunt, the Supreme Court also
addressed the issue of state aid to a religious school in a
challenge to the validity of the South Carolina Educational
Facilities Authority Act ("the Act"), under which revenue
bonds were issued to the Baptist College at Charleston, South
Carolina, a Baptist-affiliated college. Through the issuance
of the revenue bonds, the Act provided assistance to higher
educational institutions in constructing and financing projects,
such as buildings, facilities, and site preparation, specifically
excepting "any facility used or to be used for sectarian
instruction or as a place of religious worship nor any facility
which is used or to be used primarily in connection with any
part of the program of a school or department of divinity for
any religious denomination." Id. at 736.
   Applying the factors set forth in Lemon, the Court in Hunt
held that the Act did not violate the Establishment Clause,
finding in pertinent part that the statute did not have the
primary effect of advancing or inhibiting religion insofar as
the college did not have a significant sectarian orientation and
the projects were limited to those with a secular purpose. In
Hunt, the Supreme Court noted:
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                      BBBBBBBBBBBBBBBB                                 On appeal, Lipscomb first argues that the district court’s
                                                                    grant of summary judgment in favor of Plaintiffs was
                          ',66(17                                   erroneous because it rested upon a finding that Lipscomb is
                      BBBBBBBBBBBBBBBB                              a pervasively sectarian educational institution. According to
                                                                    Lipscomb, "whether an institution is ‘pervasively sectarian’
  &/$< &LUFXLW -XGJH GLVVHQWLQJ  %HFDXVH 'DYLG             is no longer a factor to be considered by the courts in these
/LSVFRPE 8QLYHUVLW\ ³/LSVFRPE´ LV LQGLVSXWDEO\ D             kinds of cases." Lipscomb’s Br. at 7. However, as the
³SHUYDVLYHO\ VHFWDULDQ´ HGXFDWLRQDO LQVWLWXWLRQ DQG EHFDXVH    majority opinion recognizes, the pervasively sectarian test has
WKHORZLQWHUHVWORDQWR/LSVFRPEWKURXJKWKHLVVXDQFHRIWKH       not been abandoned. In Johnson v. Econ. Dev. Corp. of
WD[H[HPSWERQGVE\WKH,QGXVWULDO'HYHORSPHQW%RDUG³WKH          County of Oakland, 241 F.3d 501, 510 n. 2 (6th Cir. 2001),
%RDUG´DPRXQWHGWRDGLUHFWHFRQRPLFEHQHILWLQYLRODWLRQRI       this Court pointed out:
WKH(VWDEOLVKPHQW&ODXVHRIWKH)LUVW$PHQGPHQWRIWKH86
&RQVWLWXWLRQ, I would find that the district court did not err in     The principle expressed in Hunt v. McNair, 413 U.S. 734
granting Plaintiffs’ cross-motion for summary judgment,               (1973), that government aid in the form of tax exempt
denying the separate motions for summary judgment filed by            revenue bonds of the type involved in this case violates
the Board and the Metropolitan Government ("Metro") and               the Establishment Clause--when provided to pervasively
entering a permanent injunction prohibiting the Board and             sectarian institutions--has not been disavowed, at least to
Metro from issuing additional tax-exempt bonds to Lipscomb            my knowledge, by any subsequent majority opinion of
or tax-exempt bonds to any pervasively sectarian institution.         the Supreme Court. Accord Agostini v. Felton, 521 U.S.
                                                                      203, 233 (1997) (recognizing that under the
  As will be conclusively demonstrated below, Lipscomb fits           Establishment Clause, the court must consider " ‘the
the profile of a pervasively sectarian educational institution        character and purposes of the institutions that are
by imposing religious restrictions on student admissions and          benefitted’ . . . (e.g., whether the religious institutions
faculty and staff appointments; enforcing obedience to its            were ‘predominantly religious’")) (citing Hunt, 413 U.S.
religious dogma, which is the "supreme purpose" of the                at 734-44).
University; requiring daily Bible study and attendance at
chapel as an integral part of its religious mission; and placing    241 F.3d at 510 n. 2 (parallel citations omitted.) Although the
religious limitations on how and what the faculty teach. The        majority notes that the Court questioned "[t]he vitality of the
low-interest loan of $15 million originated by the Board at         pervasively sectarian test" in Mitchell v. Helms, 530 U.S. 793
Lipscomb’s request constituted a direct economic benefit            (2000), we noted in Johnson that "it is Justice O’Connor’s
because it enabled Lipscomb to advance its sectarian mission        opinion [in Mitchell], which does not abolish the distinction
by funding improvements to the University. Given its                between ‘pervasively sectarian’ and ‘sectarian’ institutions
pervasively sectarian character, the direct economic benefit to     and which expressly declines to adopt Justice Thomas’
Lipscomb results in excessive governmental entanglement             expansive view, that is controlling upon this Court." Id.
with the religious mission of the University in violation of the
Establishment Clause.                                                 Alternatively, Lipscomb claims that even if the pervasive
                                                                    sectarian test remains relevant, the district court’s decision
                                                                    must be vacated and remanded for an evidentiary hearing
                                                                    because the court improperly "viewed ambiguous facts in a
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                        DISCUSSION                                                            BACKGROUND
  At the outset, it should be noted that Plaintiffs challenge           Before addressing the substantive issues, it is helpful to
only the constitutionality of the Tennessee statute as applied,      describe in detail the nature of Lipscomb, a private, not-for-
which authorized the Board to issue tax-exempt bonds to              profit religious corporation affiliated with the Churches of
Lipscomb or any other pervasively sectarian institution.             Christ, which was founded by David Lipscomb and James
Thus, the issue squarely presented on appeal is whether the          Harding in 1891 and originally incorporated under the name
low-interest loan by the Board to Lipscomb funded through            of "The Nashville Bible School."Characterizing itself as a
the issuance of the tax-exempt bonds violates the                    "small co-educational liberal arts university" with an
Establishment Clause because Lipscomb is a pervasively               enrollment of approximately 2,500 students, Lipscomb states
sectarian educational institution and the loan amounts to            that "its primary mission has been to integrate Christian faith
direct state aid.                                                    and practice with academic excellence." Among the
                                                                     objectives of Lipscomb are "[t]o provide the very best in a
   The point of departure for analyzing whether the low-             Christian liberal arts education under the direction of
interest loan to Lipscomb through the issuance of the tax-           Christian teachers in a distinctly Christian environment . . .
exempt bonds by the Board violated the Establishment Clause          [t]o train future leaders in the church . . . [and] . . . [t]o hold
is the test set forth in Lemon v. Kurtzman, 403 U.S. 602, 612-       up Christ as the example to follow in every field of activity."
13 (1971), as refined by the Court in Agostini v. Felton, 521        (J.A. at 38, 1249.)
U.S. 203, 232-33 (1997), which merged the excessive
government entanglement prong with the "primary effect"                According to Lipscomb’s corporate charter and the bylaws
analysis. As the majority opinion notes, the Lemon test, as          of the Board of Directors,
reformulated by Agostini, continues to have vitality. See
Zelman v. Simmons-Harris, 122 S. Ct. 2460, 2476 (2002)                 The corporation was organized for the purpose of
(O’Connor, J. concurring opinion). In the present case, the            teaching the word of God and the various branches of the
question before us concerns whether the governmental action            useful knowledge, commonly taught in institutions of
satisfies the "primary effect" test. Under this test, the Court        learning for the following general purposes: the support
in Agostini stated that the governmental aid is permissible if         of any literary or scientific undertaking, as a college or
"it does not result in governmental indoctrination; define its         university with power to confer degrees, an academy, a
recipients by reference to religion; or create an excessive            debating society lyceum, the establishment of a library,
entanglement." Id. at 234. In the matter before us, the                the support of a historical society, the promotion of
specific issue is whether the governmental aid results in              painting, music and the fine arts, the support of Board of
excessive entanglement. In assessing whether there is                  Trade or Chamber of Commerce or other objects of like
excessive entanglement, the Court in Agostini stated that "we
have looked to ‘the character and purposes of the institutions
                                                                         
that are benefited, the nature of the aid that the State provides,        7KLV SRUWUD\DO RI /LSVFRPE LV ODUJHO\ EDVHG XSRQ LWV RZQ
and the resulting relationship between the government and            SXEOLFDWLRQV WKDW GDWH IURP WKH WLPH WKDW WKH %RDUG DSSURYHG /LSVFRPE¶V
religious authority.’" Id. at 232 (quoting Lemon, 403 U.S. at        UHTXHVW IRU D ORDQ ILQDQFHG E\ WKH LVVXDQFH RI  PLOOLRQ LQ WD[H[HPSW
                                                                     ERQGV ,W VKRXOG EH QRWHG WKDW IRU WKH SXUSRVHV RI GHFLGLQJ WKH LVVXH RQ
615).                                                                DSSHDO WKHUH LV QRWKLQJ LQ WKH UHFRUG WR VXJJHVW WKDW WKH FXUUHQW
                                                                     SXEOLFDWLRQV RI /LSVFRPE DUH PDWHULDOO\ GLIIHUHQW LQ DQ\ UHOHYDQW UHVSHFW
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  nature, the support of public worship, the building of         of its functions is subsumed in its religious mission, and that
  churches and chapels and the maintenance of missionary         the $15 million dollars in tax-exempt revenue bonds had the
  undertakings.                                                  impermissible effect of promoting religion as a matter of law.
                                                                 In support of their motion for summary judgment, Plaintiffs
(J.A. at 805, 829-30). To this end, the bylaws of Lipscomb       submitted a statement of the undisputed facts. Thereafter, on
state that "[t]he President, with the assistance of vice         July 3, 2000, Lipscomb submitted its verified response to
presidents and principals, shall maintain a Christian college    Plaintiffs’ statement of undisputed material facts in support of
that shall perpetuate the high Christian ideals inaugurated by   their motion for summary judgment.
Harding and Lipscomb, the founders of David Lipscomb
College, in which the Bible is made the book of most                On October 24, 2000, the district court entered a
importance." (J.A. at 830-31.)                                   memorandum and order granting Plaintiffs’ cross-motion for
                                                                 summary judgment and denying Lipscomb and Metro’s
  As noted in the President’s letter in the 1989-1990 edition    respective motions for summary judgment. The district court
of the Student Handbook: "[W]e have a sincere interest in the    also issued a permanent injunction enjoining the Board and
spiritual values of each student and faculty staff member.       Metro from issuing any additional tax-exempt revenue bonds
Lipscomb has been built on Christian ideas. Daily Bible          for the benefit of Lipscomb or any other pervasively sectarian
study and chapel provide direction but only you can make the     institution. The district court further awarded Plaintiffs’
commitment to grow closer to God." (J.A. at 293.)                nominal damages in the amount of $1.00 each and authorized
Lipscomb’s Faculty Handbook also provides:                       attorneys’ fees for Plaintiffs. Defendants then filed timely
                                                                 notices of appeal. Subsequently, Defendants filed a motion
     The mission of David Lipscomb University is to serve        to stay further proceedings on the matter of attorneys’ fee
  its students so that they may master knowledge and skills      pending this appeal. On October 31, 2000, the district court
  appropriate to them and become Christlike in attitude and      granted the motion to stay proceedings on the attorneys’ fee
  behavior.                                                      issue.
    It must be kept firmly in the consciousness of all              Metro also asked for a stay of the permanent injunction
  connected with the institution  administration, faculty,      issued by the district court enjoining the Board and the Metro
  students, and patrons  that Lipscomb is a Christian           from issuing any additional tax-exempt revenue bonds for the
  school. In the original appeal for support, written by         benefit of Lipscomb or any other pervasively sectarian
  David Lipscomb, it was made clear that the Bible was to        institution. On July 13, 2001, the district court denied
  be the foundation upon which all else would center:            Metro’s motion for a stay pending appeal. Thereafter, in a
                                                                 motion filed on August 13, 2001, Metro appealed the district
       The supreme purpose of the school shall be to             court’s denial of its motion for a stay pending appeal. In an
     teach the Bible as the revealed will of God to man          order entered on September 25, 2001, this Court denied the
     and as the only and sufficient rule of faith and            motion for a stay pending appeal.
     practice, and to train those who will attend in a pure
     Bible Christianity, excluding from the faith all
     opinions and philosophies of men, and from the
     work and worship of the church of God all human
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at public hearings and meetings of the Board held on April                         inventions and devices. Such other branches of
10, April 16, and May 30, 1990.$WWKHPHHWLQJV3ODLQWLIIV                      learning may be added as will aid in the
RUWKHLUUHSUHVHQWDWLYHVFRPSODLQHGWKDWWKHLVVXDQFHRIWKH                       understanding and teaching of the Scriptures and as
WD[H[HPSW ERQGV IRU /LSVFRPE SURYLGHG JRYHUQPHQWDO                           will promote usefulness and good citizenship among
VXSSRUWWRDSHUYDVLYHO\VHFWDULDQLQVWLWXWLRQLQYLRODWLRQRI                     men.
WKH(VWDEOLVKPHQW&ODXVHRIWKH)LUVW$PHQGPHQWRIWKH86
&RQVWLWXWLRQ  2Q 0D\   3ODLQWLIIV DV PXQLFLSDO               (J.A. at 1627.) (emphasis in original.) The Faculty Handbook
WD[SD\HUV FRPPHQFHG WKH LQVWDQW DFWLRQ FKDOOHQJLQJ WKH                 continues by stating,
YDOLGLW\RIWKH%RDUG¶VDFWLRQLQLVVXLQJWD[H[HPSWUHYHQXH
ERQGVIRUWKHEHQHILWRI/LSVFRPE                                                 This purpose was further set forth in the deed
                                                                                 conveying the property on Spruce Street for the use of
   Eventually, on October 9, 1998, Metro and Lipscomb                            the school as follows:
separately moved for summary judgment, alleging that the
issuance of the tax-exempt revenue bonds did not violate the                        . . . that the property shall be used for maintaining a
Establishment Clause. In support of their respective motions                     school in which, in addition to other branches of
for summary judgment pursuant to Rule 56 of the Federal                          learning, the Bible as the recorded will of God and the
Rules of Civil Procedure, both Metro and Lipscomb                                only standard of faith and practice in religion, excluding
submitted separate statements of the undisputed material facts                   all human systems and opinions and all innovations,
on October 9, 1998 and October 16, 1998, respectively.                           inventions, and devices of men from the service and
Plaintiffs responded to Defendants’ statements of the                            worship of God, shall be taught as a regular daily study
undisputed material facts and filed documents in opposition                      to all who shall attend said school and for no other
to Defendants’ motions for summary judgment. Plaintiffs                          purpose inconsistent with this object. The condition
also filed a statement of additional undisputed material facts                   being herein inserted at the request of the founders of the
in opposition to Defendants’ motions on November 9, 1998.                        proposed Bible School, the same is hereby declared
Both Defendants then responded to Plaintiffs’ statement of                       fundamental and shall adhere to the premises conveyed
additional undisputed material facts on November 20, 1998                        as an imperative restriction upon their use so long as the
and December 2, 1998, respectively.                                              same shall be owned by said Bible School, or its
                                                                                 Trustees, and to any and all property which may be
   At oral argument on May 10, 2000, the district court                          purchased with the proceeds of said premises in case of
requested that Plaintiffs submit a cross-motion for summary                      sale or reinvestment, as hereinafter provided.
judgment. Pursuant to the district court’s order, Plaintiffs
filed a motion for summary judgment on May 30, 2000,                               David Lipscomb University is not, therefore, merely an
alleging that the issuance of the tax-exempt revenue bonds to                    institution which requires every student to take a lesson
Lipscomb violated the Establishment Clause because                               in the Bible each day; this study is the wellspring from
Lipscomb is so pervasively sectarian that a substantial portion                  which the university issued.
                                                                               (J.A. at 1627-28.)
     
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  These ideas about the central importance of the Bible are     HTXLSDQHZOLEUDU\UHQRYDWHDQGFRQYHUWWKHROGOLEUDU\LQWR
echoed throughout Lipscomb’s catalogues. For example, in        DGPLQLVWUDWLYHRIILFHVFRQVWUXFWDQLQWUDPXUDOEXLOGLQJRU
the university catalogue for 1988-1989, Lipscomb states:        VWXGHQWDFWLYLW\FHQWHUDQLQWUDPXUDOILHOG four new tennis
                                                                courts, and a baseball stadium; construct an addition to the
    The Bible has always been considered the most               Swang Business Center; make parking, landscaping and
  important area of study for all students at DLC [David        walkway improvements; and acquire computer and fiber optic
  Lipscomb College]. The founders and those who have            equipment.
  followed them have held it to be important that every
  student study the Bible in a class every day. Whatever           At a public meeting on April 10, 1990, the Board approved
  one’s major interest or life work, a thorough knowledge       Lipscomb’s request for the loan, which was financed by the
  of the biblical life principles is needed.                    issuance of $15 million in tax-exempt industrial development
                                                                bonds, pursuant to the Board’s authority under Tenn. Code
    In daily classes the Bible is taught as the inspired word   Ann. § 7-53-101(11)(A)(vii). After another public hearing on
  of God. With the Bible itself as the text, students are       May 30, 1990, the Board formally approved the issuance of
  encouraged to apply the Bible principles of right living      the bonds. On May 31, 1990, Nashville Mayor Bill Boner
  to all aspects of personal and professional life.             approved the issuance of the bonds, as required for tax-
                                                                exempt status under 26 U.S.C. § 147(f), thus certifying that
    In view of the daily Bible classes, it can be said that     the bonds served a public purpose.
  every Lipscomb graduate unofficially "majors in Bible."
  Those who formally major in Bible may give special              The tax-exempt bonds were then sold to private investors
  emphasis in one of the following areas: Biblical              (bondholders), and the proceeds from the bonds were loaned
  Languages, Missions, Preaching, Religious Education, or       to Lipscomb, pursuant to the loan documents. According to
  Youth Ministry.                                               the loan agreement, Lipscomb was not to use the project
                                                                funds for sectarian instruction or religious worship.
(J.A. at 41-42.) These points are reinforced in the 1990-1991   Lipscomb is also obligated to pay all sums due on the bonds.
university catalogue:                                           In January of 1991, the bonds were replaced by revenue
                                                                refunding bonds titled "Educational Facilities Revenue
  The Daily Bible Requirement                                   Refunding Bonds, Series 1991."
     The supreme purpose of David Lipscomb University              Defendant Sovran Bank, as trustee for the bondholders, was
  is "to teach the Bible as the revealed will of God to man     assigned the loan documents. Sovran Bank provided the
  and as the only and sufficient rule of faith and practice,    principal security for the bonds through a $15,969,453
  and to train those who will attend in a pure Bible            irrevocable letter of credit for the account of Lipscomb to
  Christianity." To help fulfill this purpose, each regular     Sovran Bank, N.A. as trustee for the bondholders. Additional
  student must be enrolled in a Bible class each school day     security was provided by a promissory note and loan
  and also attend daily chapel services.                        agreement entered into by Lipscomb and the Board.
    Every college or university has a right and even an          Plaintiffs are state and local taxpayers residing in Davidson
  obligation to be unique and distinctive based upon its        County, Tennessee, who objected to the issuance of the bonds
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members of the Churches of Christ, particularly during chapel                        individual purpose. Few, if any, other colleges today
service. (J.A. at 1606-07.) Moreover, while Lipscomb                                 require students to take regular daily classes in Bible
provided its students with a list of local churches in the                           study. Students who choose to attend David Lipscomb
community, it only named those affiliated with the Churches                          University should be interested and supportive of the
of Christ. (J.A. at 835-36.) Lipscomb also acknowledges that                         daily Bible requirement. The university has no authority
it prohibits students from dancing, consuming alcohol, using                         to suspend this requirement for any student.
tobacco, among other things, because it regards such conduct
as being "un-Christian conduct." (J.A. at 308-309, 835, 1191-                      (J.A. at 1253.)       Lipscomb’s 1990-91 catalogue further
92, 1472-74.)                                                                      provides:
  In response to recommendations made by the Southern                                Although the daily Bible requirement is important enough
Association of Colleges and Schools, Lipscomb undertook a                            to be listed as a separate part of each student’s academic
major development project in the early 1990s to expand and                           program, it is also considered an integral part of the general
renovate its campus to accommodate an increase in                                    education program at David Lipscomb College. No body
undergraduate enrollment to 3,000. To fund the project,                              of knowledge or study of any kind is as important as the
Lipscomb applied for a $15 million, low-interest loan from                           study of the Bible itself.
the Board.  /LSVFRPE UHTXHVWHG IXQGLQJ WR FRQVWUXFW DQG
                                                                                   (J.A. at 41, 1254.)
                                                                                     Accordingly, taking and passing a daily Bible class is a
                                                                                  "fundamental requirement for attendance" at Lipscomb. (J.A.
      The Board is a public corporation created under the authority of
Tenn. Code Ann. § 7-53-101 - § 7-53-311. Metro approved the creation               at 39-40.) As set forth in Lipscomb’s student bulletin for
of the Board by resolution as provided in Tenn. Code Ann. § 7-53-201.              1991-92:
By law, all amendments to the corporate charter of the Board must also
be approved by Metro. Tenn. Code Ann. § 7-53-204 (1985). Under the                      The Bible has always been considered the most
statute, the Board has the authority to enter into loan agreements with              important area of study for all students at David
third parties; it can sue and be sued; it can sell any of its properties; it can
issue bonds and borrow money from banks and other financial institutions             Lipscomb University. The founders, and those who have
by issuing notes. Tenn. Code Ann. § 7-53-204. In addition, the Board has             followed them, have held it to be important that every
the authority to issue tax-exempt revenue bonds for various public work              student study the Bible. Whatever their major interest or
projects, including                                                                  life work, a thorough knowledge of Biblical principles is
                                                                                     needed.
     [a]ny nonprofit educational institution in any manner related to
     or in furtherance of the educational purposes of the institution,                 In daily classes, Bible is taught as the inspired word of
     including, but not limited to classroom, laboratory, housing,
     administrative, physical education and medical research and                     God. Students are encouraged to apply the Bible
     treatment facilities.                                                           principles of right living to all aspects of personal and
                                                                                     professional life.
Tenn. Code Ann. § 7-53-101(11)(A)(vii)(1990 Supp.). After the approval
and sale of the tax-exempt bonds under the statute, the municipal
governments that approve them are not liable for repayment of the debt.
Tenn. Code Ann. § 7-53-306 (1985).
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(J.A. at 836-37, 1260.) These ideas were continually               DIWHU P\ GLVFRYHU\ GHSRVLWLRQ LQ WKH FDVH RI 6WHHOH Y
expressed in the editions of the Student Handbook from 1988        ,QGXVWULDO'HYHORSPHQW%RDUGHWDODQG,ZDVWKLQNLQJ
through 1992:                                                      DERXWWKHVHLVVXHV+HWROGKRZKHUHTXLUHGWKHVWXGHQWV
                                                                   LQKLV'DYLG/LSVFRPE8QLYHUVLW\VRFLRORJ\FODVVFDOOHG
    Because the Bible is the heart of Lipscomb’s                   ³7KH)DPLO\´WRDQVZHUDTXHVWLRQRQ(SKHVLDQV7KH
  curriculum, every regular student studies the Bible every        TXHVWLRQZDVZKHWKHUWKH\DFFHSWHGWKHGRFWULQHWKDWD
  school day. Offerings in the Department of Bible are             PDQPXVWEH³KHDG´RIWKHZLIH+HZDVVKRFNHGDQG
  arranged so that a student can, in four years, have              XSVHWWKDWRQHRIKLVVWXGHQWVKDGRQFHDFWXDOO\VDLGVKH
  exposure to the entire Bible.                                    GLGQ¶WDJUHHZLWKWKHVFULSWXUH+HFLWHGWKLVLQFLGHQWDV
                                                                   SURRIRI³WKHULVLQJWLGHRILPPRUDOLW\´+HGLGQRWVWDWH
    Any student who fails Bible is automatically placed on         ZKHWKHUKHJUDGHGWKHVWXGHQWSRRUO\
  probation for the succeeding semester. Probation must
  be removed by passing each Bible course carried during         -$DW
  the semester of probation. Failure to meet this
  requirement means that the student will be dropped at the         During the years from 1990 to1992, at the time of the
  end of the semester.                                           issuance of the bonds, more than 77% of the undergraduate
                                                                 students at Lipscomb were members of the Churches of
(J.A. at 303, 1189, 1212, 1235.) As explained by Dr. Joe Mac     Christ. (J.A. at 837, 1181.) According to the affidavit of W.
Lynn, the head of Lipscomb’s Bible Department, each student      Craig Bledsoe, the Provost at Lipscomb since 1997, 78.97%
is required to have two credit hours of Bible each semester in   of the student body indicated that they were members of the
order to graduate from Lipscomb. (J.A. at 1504-5.) From          Churches of Christ in 1991, while 71.42% of the student body
1988 until September 1992, approximately 100 undergraduate       so indicated in 1997. (J.A. at 502.) Student applications for
students were on "Bible probation." (J.A. at 834.) As noted      admission to Lipscomb during these years "required a
in the Student Handbooks, students who do not pass every         character reference from a minister, youth minister or leader
Bible course carried while on probation are subject to           at church," without specifying the denomination of the church
dismissal from the school.                                       or the religion. (J.A. at 837.) As expressed in a brochure
                                                                 from Lipscomb, "[o]ne common thread that binds students
   In addition to daily Bible study, Lipscomb also requires      together is their commitment to Christ. At Lipscomb a
every full-time student to attend chapel each school day.        student’s love for the Lord is strengthened by this special
(J.A. at 833.) As stated in Lipscomb’s Faculty Handbook:         association with other students, the majority of whom share
                                                                 the same spiritual values." (J.A. at 1635.) In his affidavit,
  Chapel                                                         Bledsoe also stated that "there are numerous other religions
                                                                 represented in the student body including, for example,
    The heart of each day’s activities at David Lipscomb         Buddhism, Lutheran, Muslim, Russian Orthodox, Hindu,
  University is the chapel service. It is here that the entire   Catholic, Mormon, Baptist, and Nazarene." (J.A. at 502). In
  Lipscomb family gains strength and inspiration for the         his supplemental affidavit, Bledsoe averred that "Lipscomb
  tasks of the day. Since attendance at chapel is                does not discriminate against students on the basis of
  compulsory for all students, it is expected that each          religion." (J.A. at 775.) Nevertheless, Dr. Sinclair testified
  faculty member will attend chapel regularly. No                in her deposition that students were pressured to become
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-$ DW   8QGHU WKH VXEKHDGLQJ RI ³$FDGHPLF             arrangements should be made which require regular
)UHHGRP´WKH)DFXOW\+DQGERRNDGGV                                   chapel absences of one or more times each week without
                                                                       prior written approval of the dean.
     (DFKPHPEHURIWKH/LSVFRPEIDFXOW\LVFRPPLWWHG
  ERWK E\ SHUVRQDO FRQYLFWLRQ DQG E\ FRQWUDFW WR WKH         (J.A. at 1401.) (emphasis in original.) As set forth in the
  SXUSRVHVDQGLGHDOVRIWKHLQVWLWXWLRQDVVHWIRUWKE\WKH         editions of the Student Handbook from 1988 through 1992, a
  IRXQGHUVDQG%RDUGRI'LUHFWRUV:LWKLQWKLVIUDPHZRUN            student with eleven absences from chapel during a semester
  HDFKWHDFKHULVIUHHWRSXUVXHDQGWHDFKWUXWKLQKLVKHU          is placed on "chapel probation." (J.A. at 303, 1189-90, 1212-
  UHVSHFWLYH ILHOG RI OHDUQLQJ  6LQFH WUXWK LV FRQVLVWHQW   13, 1235-36.) From 1990 through 1992, an average of 40 to
  HYHU\ZKHUH WKLV EDVLF FRPPLWPHQW PDNHV SRVVLEOH              60 students were on "chapel probation" each semester. (J.A.
  DFDGHPLF IUHHGRP ZLWKRXW WKH QHFHVVLW\ RI D IRUPDO          at 833, 1463.) The Student Handbooks also provide that "[i]f
  VWDWHPHQW                                                        flagrant disregard for chapel attendance persists, a student is
                                                                     subject to immediate suspension." (J.A. at 304.) In his
(J.A. at 1305.) According to Dr. Sinclair, who has had a long        deposition, Dr. Dennis Loyd, the Dean of Students at
association with Lipscomb in addition to teaching there, the         Lipscomb, testified that every full-time student "knows he
administration at Lipscomb directed members of the faculty           goes to chapel," and that failure to do so results in dismissal.
to teach certain religious doctrines or views in courses given       (J.A. at 1455-59.)
in the Biology and Physics Departments, where faculty
members are "instructed to teach creationism." (J.A. at 1616-           As stated in the bylaws of the Board of Directors, each
17.),QKHUDIILGDYLW'U6LQFODLUDOVRVWDWHG                    director at Lipscomb must be a member of the Churches of
                                                                     Christ in good standing in the congregation. (J.A. at 110.)
       7KRVH ZKR DUH QRW IDPLOLDU ZLWK WKH FKXUFK RI     The Board of Directors elects the president to be its chief
  &KULVWKDYHGLIILFXOW\XQGHUVWDQGLQJWKHUHVWULFWLYHQDWXUH        executive officer in charge of "its business and Christian
  RILWVEHOLHIV7KH%LEOHLVWDNHQYHU\OLWHUDOO\DQGYHU\        education affairs." (J.A. at 115.) The bylaws also provide
  UHVWULFWLYHO\  )RU H[DPSOH ZRPHQ DUH QRW DOORZHG WR      that "great care should be exercised in the selection and
  KROGDQ\OHDGHUVKLSSRVLWLRQVRIDQ\NLQG:RPHQDUH              development of [] teaching personnel." (J.A. at 116.)
  QRWDOORZHGWRVSHDNLQDQ\ZRUVKLSVHUYLFH:RPHQDUH            Moreover, all personnel, with the exception of employees of
  QRWDOORZHGWROHDGVLQJLQJWRPDNHDQQRXQFHPHQWVRU              its services, building and grounds departments, shall be
  WRWHDFKLQDQ\JURXSZKHUHPHQDUHSUHVHQW:RPHQDUH            members in good standing of the Churches of Christ. (J.A. at
  QRW DOORZHG WR JR WR EXVLQHVV PHHWLQJV RI WKH FKXUFK     832.) Lipscomb also reserves the right under Title VII of the
  :RPHQKDYHQRYRWHLQDQ\PHHWLQJVZRPHQKDYHQR
  VD\LQKRZWKHPRQH\FROOHFWHG LV VSHQW:RPHQDUH              Civil Rights Act of 1964 (as amended) to discriminate,
  WDXJKWWR³EHLQVXEPLVVLRQ´DWKRPHDQGLQWKHFKXUFK            "where it is necessitated by the specific religious tenets held
                                                                     by the institution." (J.A. at 834, 1250.)
    ,QRUGHUWRVHHKRZWKLVGRFWULQHDIIHFWVWHDFKLQJ
  DQG DFDGHPLF IUHHGRP DW /LSVFRPE , UHFDOO D VSHHFK          In addition, Lipscomb President Harold Hazelip
  +ROOLV 7RGG SURIHVVRU RI WKH VRFLRORJ\ GHSDUWPHQW DW       acknowledged in his deposition testimony that all of its
  /LSVFRPEDQGDQHOGHUDWP\FKXUFKJDYHRQ1RYHPEHU                faculty must be members in good standing of the Churches of
  ,WRRNQRWHVRQLWEHFDXVHLWZDVDIHZGD\V           Christ, and that leaving the church is grounds for termination
                                                                     of employment. (J.A. at 1167, 1169.) In a letter to Nashville
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Mayor Boner opposing the bond issue, Norman Parks, the                  3URIHVVRUV¶³$$83´6WDWHPHQWRI3ULQFLSOHVRQ$FDGHPLF
former dean of Lipscomb, remarked:                                      )UHHGRP,QFRQWUDVW/LSVFRPE¶V)DFXOW\+DQGERRNVWDWHV
  No person can be employed at Lipscomb who is not a                        ,Q WKH ILQDO DQDO\VLV WKH ZRUWK RI DQ\ HGXFDWLRQDO
  member of the mainline Church of Christ. He cannot be                   LQVWLWXWLRQLVGHWHUPLQHGE\LWVIDFXOW\,WLVRIVSHFLDO
  a premillennialist or believe that instrumental music is                LPSRUWDQFHLQWKH&KULVWLDQXQLYHUVLW\WKDWHYHU\WHDFKHU
  acceptable for worship of God. He must believe that a                   EHILUVWGHGLFDWHGWR&KULVWDQG+LVWUXWKGHPRQVWUDWLQJ
  divorced person cannot remarry and continue in church.                  WKRVHTXDOLWLHVRIKHDUWDQGOLIHZKLFKZLOOLQVSLUH\RXQJ
  He must believe that a woman cannot teach a class in                    SHRSOHWRORYHWKH/RUGDQGVWULYHWRSOHDVH+LP7KLV
  religion to men.                                                        GHYRWLRQ PXVW EH DFFRPSDQLHG E\ VRXQG VFKRODUVKLS
                                                                          DZDUHQHVVRIVWXGHQWQHHGVDQGDGHWHUPLQHGGHVLUHWR
(J.A. at 1142.) In this regard, Dr. Lynn, the head of                     VHUYH
Lipscomb’s Bible Department, testified in his deposition that
a divorced teacher may be allowed to remain as a teacher at
the university, but "[a] person who divorces and remarries
during the [] employment relationship to [sic] the University               
would be subject to discipline or to dismissal." (J.A. at 1539.)             7KH $$83¶V SULQFLSOHV SURYLGH
According to Dr. Susan Dennison Sinclair, she was informed                  D   7HDFKHUV DUH HQWLWOHG WR IXOO IUHHGRP LQ UHVHDUFK DQG LQ WKH
by the department chairman when she was hired as an adjunct                      SXEOLFDWLRQ RI WKH UHVXOWV VXEMHFW WR WKH DGHTXDWH SHUIRUPDQFH
professor in the English Department for one semester in 1990                     RI WKHLU RWKHU DFDGHPLF GXWLHV EXW UHVHDUFK IRU SHFXQLDU\ UHWXUQ
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YDULRXVSHUVRQDOTXHVWLRQVRQHRIWKHPEHLQJWKHIDFWWKDWP\                   WKH LQVWLWXWLRQ
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