In the
United States Court of Appeals
For the Seventh Circuit

No. 99-2850

FREEDOM FROM RELIGION FOUNDATION,
INCORPORATED, ANNE GAYLOR, ANNIE LAURIE
GAYLOR and DAN BARKER,

Plaintiffs-Appellees,

v.

MARK D. BUGHER, Secretary of
the Wisconsin Department
of Administration and member
of the TEACH Wisconsin
Board, JOHN T. BENSON,
Superintendent of Public
Instruction and member of
the TEACH Wisconsin Board,
RAYMOND ALLEN, GUS WIRTH, JR.,
L. ANNE REID, JONATHAN BARRY,
JAMES M. BOWEN, RODNEY G.
PASCH, and DARYLANN WHITEMARSH,
members of the TEACH Wisconsin
Board,

Defendants-Appellants.



Appeal from the United States District Court
for the Western District of Wisconsin.
No. 98-C-0767-S--John C. Shabaz, Chief Judge.


Argued November 13, 2000--Decided April 27, 2001



 Before HARLINGTON WOOD, JR., KANNE, and DIANE P. WOOD,
Circuit Judges.

 HARLINGTON WOOD, JR., Circuit Judge. On November
4, 1998, Freedom From Religion Foundation, Inc.,
a national organization whose purpose is to
protect the fundamental constitutional principle
of separation of church and state, and individual
plaintiffs Anne Gaylor, Annie Laurie Gaylor, and
Dan Barker (collectively, the "Plaintiffs")
initiated this action. Pursuant to 42 U.S.C. sec.
1983, Plaintiffs challenged the constitutionality
of a Wisconsin program which subsidizes
telecommunications access for both public and
private, sectarian and nonsectarian, schools. On
cross motions for summary judgment, the district
court concluded that the program was
constitutional except for that portion which
provided unrestricted cash grants to private,
sectarian schools in order to reduce the cost of
their existing telecommunications access
expenses. The court granted summary judgment in
part in favor of the Defendants, finding the
access portion of the program was constitutional,
and in part in favor of the Plaintiffs, finding
that the grant aspect of the program was
unconstitutional under the Establishment Clause.
The Defendants appeal from the summary judgment
in favor of the Plaintiffs as to the grant
portion of the program. Although the Plaintiffs
had initially appealed the summary judgment in
favor of the Defendants that the major portion of
the program was constitutional, after the
publication of Mitchell v. Helms, 530 U.S. 793,
120 S.Ct. 2530 (2000), a case which challenged
the constitutionality of state and federal school
aid programs as applied to parochial schools in
Louisiana, Plaintiffs dismissed their cross
appeal. We have jurisdiction under 28 U.S.C. sec.
1291, and we affirm the district court’s holding.


I.   Background

 The 1997-98 Wisconsin Budget Act, 1997 Wis. Act
27, created the Technology for Education
Achievement Board (the "TEACH board"), which
administers the Educational Telecommunications
Access program, Wis. Stat. sec. 196.218 (4r) (the
"program"). Defendants are members of the TEACH
board. The program is funded by mandatory
contributions from telecommunications providers
who are permitted to increase their rates to
customers in order to recover the costs. The
individual plaintiffs are taxpayers of the state
of Wisconsin and are local telephone service
customers of Ameritech Wisconsin. The individual
plaintiffs pay a monthly surcharge to Ameritech
by which Ameritech recovers its contributions
used to fund the program.

 Under the terms of the program, private
elementary and secondary schools and colleges,
technical colleges, cooperative educational
service organizations, public library boards, and
public school districts are able to request that
the TEACH board provide them with access to one
data line or video link, which enables the user
to access the Internet. A video link also enables
the user to create an interactive television
hook-up whereby students and a teacher can see,
hear, and speak to each other via television from
remote locations. The data lines and video links
provided by the state under the program are
heavily subsidized. Although program participants
are charged $100 per month for a data line and
$250 per month for a video link, the cost to the
program to provide a data line and a video link
is approximately $640 and $2,300 per month,
respectively.

 Private schools and colleges, almost all of
which are religiously affiliated, are not
permitted to participate in any of the broader
aspects of the legislative initiatives, but are
authorized only to participate in the portion of
the program that allows them to contract with the
state for low-cost access to a data line or video
link, or to receive grants to reduce the net cost
of their existing data line or video link. These
private schools account for approximately ten
percent of the total cost of the program. The
program does not in any way control the content
of information received by participants over the
data lines or video links, although such links
are sometimes used to transmit religious
information.

 The program was amended in 1997 by Wis. Act 237
to provide grants to school districts and private
schools which had contracts for access to a data
line or video link in effect on October 14, 1997.
The grant amount is the difference between the
cost to the program to supply a link less the
ordinary contribution of the school, but not to
exceed the actual contract cost. Wis. Stat. sec.
196.218 (4r)(g). No statutory restriction is
placed on the use of the grant funds, although a
letter accompanying the grant provides that the
funds are to be used for "educational technology
purposes . . . includ[ing] making payments on the
existing service contract, purchasing hardware
and software, providing training to teachers and
staff, upgrading existing networks, wiring school
buildings, or completing any other educational
technology project."

 Prior to the district court’s ruling, the
program had awarded annual grants of $1,944,261
to 130 schools and colleges. A portion of that
total, $58,873, approximately three percent, has
been awarded to nine private, religiously-
affiliated schools and colleges participating in
the grant portion of the program. These nine
schools represent not quite seven percent of the
total number of schools participating in this
aspect of the program. Only these unrestricted
cash grants to religious schools are at issue in
this appeal.

II. Analysis
A. Standing

 Standing is "the threshold question in every
federal case, determining the power of the court
to entertain the suit." Warth v. Seldin, 422 U.S.
490, 498 (1975). Under Article III, only a
plaintiff with a personal stake in a case or
controversy has standing. Gonzales v. North
Township, 4 F.3d 1412, 1415 (7th Cir. 1993). This
personal stake can be established only if the
plaintiff has suffered an injury in fact. Warth,
422 U.S. at 499. At the summary judgment stage,
the plaintiff must produce evidence in the form
of Fed.R.Civ.P. 56(e) affidavits or documents
that support the injury allegation. See United
States v. Students Challenging Regulatory Agency
Procedures (SCRAP), 412 U.S. 669, 689 (1973);
Gonzales, 4 F.3d at 1415. Plaintiffs have met the
standing requirement by showing that as taxpayers
their tax dollars have gone to support an
allegedly unconstitutional program which
contributes unrestricted cash grants to religious
schools. See Flast v. Cohen, 392 U.S. 83, 105-06
(1968); Gonzales, 4 F.3d at 1416; Freedom From
Religion Found., Inc. v. Zielke, 845 F.2d 1463,
1470 (7th Cir. 1988).

B.   Cash Grants

 We review de novo the decision of the district
court to grant summary judgment. See Gonzales, 4
F.3d at 1417 (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249-52 (1986)). Summary
judgment is proper when the "pleadings,
depositions, answers to interrogatories, and
admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to
any material fact and that the moving party is
entitled to a judgment as a matter of law."
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986). In determining whether
a genuine issue of material fact exists, we must
review the record in the light most favorable to
the Defendants in this case and make all
reasonable inferences in their favor. See
Anderson, 477 U.S. at 255 (citation omitted).
Because the parties do not dispute the material
facts, we review de novo the district court’s
conclusions of law. See Freedom from Religion
Found., Inc. v. City of Marshfield, 203 F.3d 487,
490 (7th Cir. 2000) (citation omitted).

 The Establishment Clause, which states that
"Congress shall make no law respecting the
establishment of religion," U.S. const. amend.
I., cl. 1, prevents the government from promoting
or affiliating with any religious doctrine or
organization. See County of Allegeheny v.
American Civil Liberties Union, 492 U.S. 573, 590
(1989); Gonzales, 4 F.3d at 1417. The
Establishment Clause also "is a specific
prohibition on forms of state intervention in
religious affairs . . . ." Lee v. Weisman, 505
U.S. 577, 590 (1992). This applies equally to
state legislatures under the due process clause
of the Fourteenth Amendment. See Cantwell v.
Connecticut, 310 U.S. 296, 303 (1940). In
addition, the Wisconsin Constitution, art. I,
sec. 18, provides, "nor shall any money be drawn
from the treasury for the benefit of religious
societies, or religious or theological
seminaries," which has been held to be the
equivalent of the Establishment Clause by the
Wisconsin Supreme Court. See Jackson v. Benson,
578 N.W.2d 602, 620 (Wis. 1998) (citation
omitted).

 In an effort to prevent sponsorship, financial
support, or active involvement of the government
in religious activity, see Walz v. Tax Comm’n,
397 U.S. 664, 668 (1970), the Supreme Court
formulated a three-pronged test to determine
whether a statute complies with the Establishment
Clause. See Lemon v. Kurtzman, 403 U.S. 602, 612
(1971). Under this test, a statute does not
violate the Establishment Clause if (1) it has a
secular legislative purpose, (2) its principal or
primary effect neither advances nor inhibits
religion, and (3) it does not create excessive
entanglement between government and religion. Id.
at 612-13. In Agostini v. Felton, 521 U.S. 203
(1997), the Supreme Court modified the Lemon test
in cases involving school aid, emphasizing the
continuing importance of the first two prongs of
Lemon, but determining that entanglement could be
considered as an aspect of the second prong’s
"effect" inquiry. Id. at 222-23. The Court then
used "three primary criteria" in evaluating
whether government aid has the effect of
advancing religion: whether the statute or
program in question "result[s] in governmental
indoctrination; define[s] it recipients by
reference to religion; or create[s] an excessive
entanglement." Id. at 234.

 Plaintiffs concede that the TEACH program has a
secular purpose, that of encouraging schools to
use and teach telecommunications, and that the
program does not foster excessive governmental
entanglement with religion. Therefore, the first
and third prongs of the Lemon test are not at
issue in this case. Our inquiry is a narrow one
where only the "effect" of the governmental aid
need be considered. See Mitchell, 120 S.Ct. at
2540. We must determine under the second prong of
Lemon whether or not the principal or primary
effect of direct cash grants advances or inhibits
religion. Under Agostini’s "three primary
criteria" review of this prong, the statute
clearly does not define its recipients by
reference to religion and Plaintiffs concede
there is no excessive entanglement. See Agostini,
521 U.S. at 234. Therefore, only the first
criteria need be examined under the effect
inquiry--whether the direct cash grant portion of
the program results in governmental
indoctrination. See Mitchell, 120 S.Ct. at 2540.
"[T]he question whether governmental aid to
religious schools results in governmental
indoctrination is ultimately a question whether
any religious indoctrination that occurs in those
schools could reasonably be attributed to
governmental action." Id. at 2541.

 The Supreme Court has stated that direct aid is
considered to have a "principal or primary
effect" of advancing religion if the aid goes to
institutions that are "pervasively sectarian."
See Bowen v. Kendrick, 487 U.S. 589, 610 (1988);
Hunt v. McNair, 413 U.S. 734, 743 (1973). The
Court described a "pervasively sectarian" school
as "’an institution in which religion is so
pervasive that a substantial portion of its
functions are subsumed in the religious mission
. . . .’" Bowen, 487 U.S. at 610 (quoting Hunt,
413 U.S. at 743). However, the Court itself has
cautioned against using this analytical shortcut.

The Establishment Clause like the Due Process
Clause is not a precise, detailed provision in a
legal code capable of ready application. . . .
The line between permissible relationships and
those barred by the Clause can no more be
straight and unwavering than due process can be
defined in a single stroke or phrase or test. The
Clause erects a "blurred, indistinct, and
variable barrier depending on all circumstances
of a particular relationship."

Lynch v. Donnelly, 465 U.S. 668, 678-79 (1984)
(quoting Lemon, 403 U.S. at 614). The Court noted
that "an institution is not pervasively sectarian
merely because it is religiously affiliated." See
Hunt, 413 U.S. at 743. Further blurring the lines
of this direct test, the Court in Agostini held
that government aid to a pervasively sectarian
institution does not impermissibly advance
religion if it is the result of private choices
of the individual rather than state
decisionmaking, where the aid supplements rather
than supplants the school’s core educational
funding. 521 U.S. at 226. The Court in Mitchell,
which relies on Agostini to fashion its review
for indoctrination, stated that "nothing in the
Establishment Clause requires the exclusion of
pervasively sectarian schools from otherwise
permissible aid programs, and other doctrines of
this Court bar it. This doctrine, born of
bigotry, should be buried now." Mitchell, 120
S.Ct. at 2552 (Thomas, J., plurality opinion).
Given this ambiguity as to the necessity of
determining whether the schools were pervasively
sectarian or not, this line of cases indicates
that regardless of whether schools are
pervasively sectarian or not, states may not make
unrestricted cash payments directly to religious
institutions. See Tilton v. Richardson, 403 U.S.
672, 680-83 (1971). "[T]he State may not grant
aid to a religious school, whether cash or in
kind, where the effect of the aid is ’that of a
direct subsidy to the religious school’ from the
State." Witters v. Wash. Dept. of Servs. for
Blind, 474 U.S. 481, 487 (1986) (quoting Grand
Rapids School Dist. v. Ball, 473 U.S. 373, 394
(1985)). This direct subsidy is viewed as
governmental advancement or indoctrination of
religion. The Supreme Court has recognized that
"special Establishment Clause dangers [exist]
where the government makes direct money payments
to sectarian institutions . . . ." Rosenberger v.
Rector and Visitors of Univ. of Va., 515 U.S.
819, 842 (1995) (listing cases); see also
Mitchell, 120 S.Ct. at 2546.

 Of the cases which follow Lemon, the one most
directly on point with the present case is
Committee for Public Education v. Nyquist, 413
U.S. 756 (1973). In Nyquist, a New York statute
provided in part direct money grants from the
state to qualifying nonpublic, nonprofit schools,
most of which were church-affiliated, id. at 768,
to be used for maintenance and repair of school
facilities and equipment to ensure the health,
welfare, and safety of enrolled pupils. Id. at
762. Each qualifying school was required to
submit an audited statement of its expenditures
for maintenance and repair during the preceding
year, and the grant could not exceed the total of
the expenses. Id. at 764. The Court reviewed the
grant program to determine whether there had been
"sponsorship, financial support, [or] active
involvement of the sovereign in religious
activity." Id. at 772 (citing Walz, 397 U.S. at
668, and Lemon, 403 U.S. at 612). Although the
Court found that the grant program passed the
first prong of the Lemon test, that of secular
purpose, it held that direct monetary payments to
the schools, particularly where no restrictions
are made requiring the money to be used for
secular purposes only, failed the second prong of
the test. Id. at 773, 776-77, 779-80.

Nothing in the statute, for instance, bars a
qualifying school from paying out of state funds
the salaries of employees who maintain the school
chapel, or the cost of renovating classrooms in
which religion is taught, or the cost of heating
and lighting those same facilities. Absent
appropriate restrictions on expenditures for
these and similar purposes, it simply cannot be
denied that this section has a primary effect
that advances religion in that it subsidizes
directly the religious activities of sectarian
elementary and secondary schools.

Id. at 774.
 The Court repeated the warning that "a secular
purpose and a facial neutrality may not be
enough, if in fact the State is lending direct
support to a religious activity," in Roemer v.
Board of Public Works of Maryland, 426 U.S. 736,
747 (1976). In Roemer, the Court held that the
Establishment Clause permits direct state-money
grants to general secular educational programs of
non-pervasively sectarian religious colleges
where there is a statutory prohibition against
sectarian use and an administrative enforcement
of that prohibition. 426 U.S. at 759. Therefore,
even if the sectarian schools in the present case
were found not to be pervasively sectarian, the
direct aid portion of the program still fails
because there are no statutory prohibitions or
administrative enforcements in place. See Roemer,
426 U.S. at 759; Nyquist, 413 U.S. at 776-77. The
possible effect of religious indoctrination is
not altered by the letter from the TEACH board
which accompanies the grant and purports to
restrict the use of the grant money. There is no
authority in the statute for such a limitation,
nor is there any penalty for failure to comply.
See Wis. Stat. sec. 196.218(4r)(g). In addition,
there is no evidence of any ability or attempt to
monitor the use of the grant money received by
the religious schools. Unlike Roemer, in both
Nyquist and this case, there are no real
restrictions on the use of the grant money by the
religious schools; the money may be used as
easily for maintenance of the school chapel or
for the religious instruction classrooms or for
connection time to view a religious website,
instead of payment for the telecommunications
links. See Nyquist, 413 U.S. at 774; Simmons-
Harris v. Zelman, 234 F.3d 945, 959 (6th Cir.
2000).

 Defendants argue that recent Supreme Court
cases, by implication, have overruled Nyquist and
other precedential cases on this issue. We note
that Agostini does not hold that government
funding that directly flows to "the coffers of
religious schools" would survive an Establishment
Clause challenge. 521 U.S. at 228-29. Also, as
the Court pointed out in Rosenberger, "We do not
confront a case where, even under a neutral
program that includes nonsectarian recipients,
the government is making direct money payments to
an institution or group that is engaged in
religious activity." 515 U.S. at 842. Defendants
state that "the district court’s opinion [which
struck down the entire grant aspect of the
program] cannot stand in light of the plurality
and concurring opinions in Mitchell." The Court
in Mitchell specifically stated that there may be
"special Establishment Clause dangers . . . when
money is given to religious schools or entities
directly rather than . . . indirectly. . . . But
direct payments of money are not at issue in this
case . . . ." 120 S.Ct. at 2546 (quotations and
citations omitted) (emphasis in original).
Mitchell is clearly distinguished from the issue
at hand in that the federal government
distributed funds to state and local governmental
agencies, which in turn lent educational
materials and equipment to public and private
schools. 120 S.Ct. at 2536. Only Wolman v.
Walter, 433 U.S. 229, 248-51 (1977), and Meek v.
Pittenger, 421 U.S. 349, 362-66 (1975) (both
cases holding in pertinent part that the lending
of instructional materials and equipment to
religious schools was unconstitutional), were
specifically overruled by Mitchell. Id. at 2555.

 In addition, the Supreme Court has refuted the
possibility of overruling precedent by
implication.

[I]f a precedent of this Court has direct
application in a case, yet appears to rest on
reasons rejected in some other line of decisions,
the Court of Appeals should follow the line of
cases which directly controls, leaving to this
Court the prerogative of overruling its own
decisions.

Agostini, 521 U.S. at 237 (quotations and
citation omitted). "In the absence of an
effective means of guaranteeing that the state
aid derived from public funds will be used
exclusively for secular, neutral, and
nonideological purposes, it is clear from our
cases that direct aid in whatever form is
invalid." Nyquist, 413 U.S. at 780; see also
Strout v. Albanese, 178 F.3d 57, 64 (1st Cir.
1999) ("approving direct payments of tuition by
the state to sectarian schools represents a
quantum leap that we are unwilling to take."
(emphasis in original)). Therefore, until the
Supreme Court has clearly overruled Nyquist, we
must apply its holding, which "directly controls"
this case. See Agostini, 521 U.S. at 237. The
Wisconsin direct grant program impermissibly
provides a direct subsidy to participating
religious schools.

III.   Conclusion

 For the above-stated reasons, we AFFIRM the
district court’s order granting summary judgment
in part to the Plaintiffs.
