 United States Court of Appeals
                    For the Seventh Circuit
                    Chicago, Illinois 60604

                            MAY 3, 2006

                               Before
     Hon. Joel M. Flaum, Chief Judge
     Hon. Richard A. Posner, Circuit Judge
     Hon. Frank H. Easterbrook, Circuit Judge
     Hon. Kenneth F. Ripple, Circuit Judge
     Hon. Daniel A. Manion, Circuit Judge
     Hon. Michael S. Kanne, Circuit Judge
     Hon. Ilana Diamond Rovner, Circuit Judge
     Hon. Diane P. Wood, Circuit Judge
     Hon. Terence T. Evans, Circuit Judge
     Hon. Ann Claire Williams, Circuit Judge
     Hon. Diane S. Sykes, Circuit Judge
No. 05-1130
FREEDOM FROM RELIGION FOUNDATION, INC., et al.,
                                                Plaintiffs-Appellants,
                                  v.


ELAINE L. CHAO, Secretary of Department of Labor, et al.,
                                               Defendants-Appellees.
                           ____________
              Appeal from the United States District Court
                for the Western District of Wisconsin.
                  04 C 0381S—John C. Shabaz, Judge.
                           ____________
2                                                 No. 05-1130

                        ORDER
  On March 13, 2006, defendants-appellees filed a petition
for rehearing with suggestion of rehearing en banc. A vote
of the active members of the Court was requested, and a
majority has voted to deny the petition.Œ The petition is
therefore DENIED.




  FLAUM, Chief Judge, concurring in the denial of rehearing
en banc. Along with Judge Easterbrook, my vote to deny the
petition for rehearing en banc is not premised upon a
conclusion that the taxpayer standing issue as addressed in
the panel opinion is free from doubt. Indeed, the position
set forth in the dissent is one which could eventually com-
mand high court endorsement. However, the obvious
tension which has evolved in this area of jurisprudence, as
evidenced by the scholarly opinions of Judge Posner and
Judge Ripple, can only be resolved by the Supreme Court.
In my judgment, the needed consideration of this important
issue by that tribunal would be unnecessarily delayed by our
further deliberation.




Œ
  Chief Judge Flaum and Judge Easterbrook have written
opinions concurring in the denial of the petition for rehearing
en banc. Judge Ripple has written an opinion, which Judge
Manion, Judge Kanne, and Judge Sykes have joined, dissenting
from the denial of the petition.
No. 05-1130                                                    3

   EASTERBROOK, Circuit Judge, concurring in the denial of
rehearing en banc. My vote to deny the petition for re-
hearing en banc does not imply that I deem the panel’s
resolution beyond dispute or the issue unimportant. To the
contrary, the subject is both recurring and difficult, and there
is considerable force in Judge Ripple’s dissent, 433 F.3d 989,
997-1001 (7th Cir. 2006), and in the standing analysis of
Judge Sykes’s dissent from Laskowski v. Spellings, No. 05-2749
(7th Cir. Apr. 13, 2006), slip op. 19-28, which extends this
panel’s holding. Two divided decisions on related matters
that put the judicial and the political branches of the federal
government at odds imply the wisdom of further review. My
vote to deny rehearing rests on a conclusion that this is not
the right forum for that further deliberation.
   The principal difficulty with arguments pro and con
about taxpayer standing is that the doctrine is arbitrary.
Taxpayers lack standing to complain about almost all
expenditures. Flast v. Cohen, 392 U.S. 83 (1968), held that
taxpayer suits about religious outlays are special but de-
clined to overrule Frothingham v. Mellon, 262 U.S. 447 (1923),
which holds that taxpayers lack standing to complain about
public expenditures. To the extent that the Establishment
Clause forbids taxation to support religion, people subject to
the illegal levy may obtain relief, but plaintiffs in this
litigation do not say that they have paid one extra penny
because of the grant. Where’s the concrete injury? The loss (if
any) is mental distress that plaintiffs, who are bystanders to
the challenged program, suffer by knowing about conduct
that they deem wrongful. Article III does not permit courts
to entertain such complaints. See Lujan v. Defenders of Wild-
life, 504 U.S. 555 (1992); Allen v. Wright, 468 U.S. 737 (1984);
Simon v. Eastern Kentucky Welfare Rights Organization, 426
U.S. 26 (1976); United States v. Richardson, 418 U.S. 166 (1974);
Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208
4                                                  No. 05-1130

(1974). Cf. Metro-North Commuter R.R. v. Buckley, 521 U.S. 424
(1997). Yet Flast has so far resisted efforts either to cabin it
or to incorporate its approach into a more general frame-
work of justiciability.
  Our panel’s majority has concluded that the doctrine of
taxpayer standing will be more logical if it covers admin-
istrative as well as legislative earmarks. I grant that prop-
osition—but comprehensiveness and rationality are not
this doctrine’s hallmarks. Why may taxpayers complain
about outlays of cash but not about a distribution of real or
personal property? See Valley Forge Christian College v.
Americans United for Separation of Church & State, Inc., 454 U.S.
464 (1982). Cash may be exchanged for property or
the reverse; a distinction between cash and property for the
purpose of standing is illogical but embedded in the cases.
   Why may taxpayers complain about modest expenditures
(the grant in Laskowski was $500,000, or less than a cent
per U.S. taxpayer) but not about slightly smaller ones?
According to the panel, a complaint that the President
used the State of the Union Address to promote religion
is not justiciable. The panel dismissed a claim against the
Secretary of Education that rested on the expense that the
Secretary had incurred to deliver a speech. See 433 F.3d
at 995-96. The total cost of presidential proclamations
and speeches by Cabinet officers that touch on religion
(Thanksgiving and several other holidays) surely exceeds
$500,000 annually; it may cost that much to use Air Force
One and send a Secret Service detail to a single speak-
ing engagement. If money from the Treasury is to supply
the identifiable trifle for standing, then the only tenable
line is between $0 (no cost to taxpayers as a whole) and $1
(some cost, however dilute); yet the panel draws a line
between $500,000 and $50,000 or $5,000 (even if there are lots
No. 05-1130                                                  5

of speeches or proclamations at $5,000 or $50,000 apiece).
Where is the coherence in such a doctrine? That no court
is willing (yet!) to entertain a suit about a speech that
costs $50,000 to draft, deliver, and distribute through the
Government Printing Office—while adjudicating objec-
tions to $500,000 grants that do not cost the plaintiff even
1¢—suggests problems in Flast’s underpinning and ap-
plication.
   Perhaps Michael Newdow should have invoked his
tax return, rather than his status as a father, to challenge
the inclusion of “under God” in the Pledge of Allegiance.
What is the price tag in both money and the opportunity cost
of time to print many million copies of that phrase and read
it daily in thousands of classrooms? As it was, however, the
Supreme Court deemed his suit non-justiciable. See Elk Grove
Unified School District v. Newdow, 542 U.S. 1 (2004).
  But this arbitrariness is built into the doctrine as it comes
to us. Nothing we can do would eliminate the tension
between Flast and Bowen v. Kendrick, 487 U.S. 589 (1988), on
the one hand, and Frothingham and Valley Forge (plus the
many cases such as Defenders of Wildlife) on the other. The
problem is not of our creation and cannot be resolved locally.
There is no logical way to determine the extent of
an arbitrary rule. Only the rule’s proprietors can bring
harmony—whether by extension or contraction—or decide
to tolerate the existing state of affairs.
6                                                 No. 05-1130

  RIPPLE, Circuit Judge, with whom MANION, KANNE and
SYKES, Circuit Judges, join, dissenting from the denial of
rehearing en banc. The Government has requested that the
court hear this case en banc. Because the decision of the
panel majority departs significantly from established
Supreme Court precedent and creates an inter-circuit
conflict, I believe that the Government’s considered re-
quest reflects its serious concern about the impact of the
panel majority’s holding on executive governance. Therefore,
I believe that the case should be set for rehearing en banc,
and that a decision be rendered that reflects the view of the
entire court. Indeed, because this case also reflects a view
about the nature of Article III judicial power, the case has
serious implications for judicial governance, and we, as
officers of that branch, have a special duty to ensure that a
decision expanding the authority that we claim for ourselves
represents the considered judgment of every judge on this
court. Such a review is especially appropriate when the
Government specifically charges, as it has here, that the court
has “greatly exceeded its authority by ignoring the Supreme
Court’s own rules . . . and substituting its own views of what
the law rationally ought to be.” Pet. Reh’g at 13.
  The panel majority’s opinion does not square with the
Supreme Court’s taxpayer standing cases beginning
with Flast v. Cohen, continuing with Valley Forge Christian
College, and ending most recently with Bowen v. Kendrick.
In each of these cases, the plaintiffs’ claims to taxpayer
standing turned on the strength of the nexus demonstrated
between their status as taxpayers and the challenged congres-
sional expenditure. In Flast, taxpayers had shown such a
nexus because they alleged that Congress had violated the
Establishment Clause by authorizing grants to parochial
schools, even though the money passed through an executive
agency. Bowen found a sufficient taxpayer nexus to challenge
the constitutionality of a congressional spending program that
No. 05-1130                                                    7

allowed religious institutions to receive federal funds, even
though the program was administered by the Secretary of
Health and Human Services. By contrast, Valley Forge
prohibited taxpayers from halting a purely executive
decision to transfer surplus public land to a religious
institution. What distinguished the Valley Forge plaintiffs
from those in Flast and Bowen was that “the source of their
complaint [was] not a congressional action, but a decision by
[the executive agency] to transfer a parcel of federal prop-
erty.” Valley Forge, 454 U.S. at 479. In short, Valley Forge held
that the constitutionally-required nexus between a plaintiff’s
status as taxpayer and “ ‘exercises of congressional power’ ”
erodes without an allegation that Congress has violated the
Establishment Clause. Id. (quoting Flast, 392 U.S. at 102).
   Here, as in Valley Forge, the plaintiffs do not complain of
any action taken by Congress. The plaintiffs never alleged
that Congress violated the Establishment Clause by appro-
priating funds. Here, as in Valley Forge, there is no allega-
tion that Congress authorized the challenged activities;
and, as far as the record reflects, the challenged executive
action involved no more incidental expenditure than the
transfer of public land in Valley Forge. Nevertheless, the
panel decision held that the plaintiffs had standing because
the congressional appropriation was “necessary for the
violation to occur,” Freedom From Religion Foundation, Inc. v.
Chao, 433 F.3d 989, 993 (7th Cir. 2006). Some expenditure
of governmental funds is necessary for every executive
action. That reality is present here as it was present in Valley
Forge. However, the Supreme Court, in making an excep-
tion to usual standing rules for taxpayers has drawn a
very clean line in order to avoid making the federal
courts a forum for all sorts of complaints about the con-
duct of governmental affairs on no basis other than citizen
standing. Abolishing or even diluting a standard so explicitly
set by the Supreme Court simply is not an appropriate
8                                                     No. 05-1130

decision for us to make. We have a duty to apply faith-
fully the precedent of the Supreme Court until that precedent
is overruled by the Supreme Court. See State Oil Co. v. Kahn,
522 U.S. 3, 20 (1997).
   We also ought to hear this case en banc because the
panel majority has created a clear conflict on this issue.
Most to the point is In re United States Catholic Conference,
885 F.2d 1020 (2d Cir. 1989). There, the Court of Appeals
for the Second Circuit denied taxpayer standing to pro-
choice supporters who sought to challenge a decision by
the IRS to grant tax-exempt status to the Catholic Church.
Critically, as in Valley Forge and in this case, the plain-
tiffs had not asserted that Congress wrote the Internal
Revenue Code in a manner that favored the Catholic Church.
Nor had they alleged that the Code authorized the IRS to do
what it was doing (allegedly closing its eyes to violations by
the Church). Instead, “[t]he complaint center[ed] on an
alleged decision made solely by the executive branch that, in
plaintiffs’ view, directly contravene[d] Congress’ aim.” Id. at
1028. The plaintiffs therefore had not established, as the
Supreme Court requires, “a sufficient nexus between the
taxpayer’s standing as a taxpayer and the congressional
exercise of taxing and spending power.” Id. (emphasis
added). The present case is indistinguishable.1
    Fortunately, this case not only meets the criteria for


1
  The panel majority’s terse attempt to distinguish In re United
States Catholic Conference on the basis of there being, in that
case, “no expenditure of appropriated funds,” Freedom From
Religion Foundation, Inc. v. Chao, 433 F.3d 989, 993 (7th Cir. 2006),
misses the mark. For purposes of taxpayer standing, a tax
exemption is no different from a positive appropriation, and
no less an exercise of Congress’ power to tax and spend for
the general welfare. See U.S. Const. art. I, sec. 8.
No. 05-1130                                                  9

en banc review set forth in our rules, see Fed. R. App. P. 35,
but also the criteria for certiorari review in the Supreme
Court of the United States, see Sup. Ct. R. 10. This court
has “decided an important federal question in a way
that conflicts with the relevant decisions” of the Su-
preme Court. See Sup. Ct. R. 10(c). It also has “entered a
decision in conflict with the decision of another United States
court of appeals on the same important matter.” Sup. Ct. R.
10(a). The Government therefore has one last forum in which
to seek a return to traditional principles governing the right
of a taxpayer to challenge a decision of the executive.

A true Copy:
        Teste:

                           _____________________________
                            Clerk of the United States Court of
                              Appeals for the Seventh Circuit
