WASHINGTON (CN) - A federal judge said the U.S. Department of Agriculture must take another look at its denial of an application for a federal loan from a religiously based pregnancy center in Vermont.
The Care Net Pregnancy Center of Windham County sued the USDA and Secretary Thomas Vilsack after the agency denied its application for a government-sponsored loan to build a ministry center to help young women cope with unplanned pregnancies.
The problem, according to the USDA, is that religious outfits may not use the agency's Community Facilities Loan Program for overtly religious purposes, and Care Net planned to use the center also for Bible study.
Care Net appealed the denial to the USDA, but a hearing officer found that the nonprofit failed to satisfy the faith-based eligibility requirements of the loan program.
U.S. District Judge Reggie Walton remanded Care Net's federal complaint back to the USDA appeals department for further review, finding that the agency failed to address major issues.
"The court finds that the appeals division erred in ignoring: Care Net's properly presented claims under the Free Speech and Equal Protection Clauses, which asserted as-applied challenges to the USDA's actions in this case; the USDA's defense under the Establishment Clause, to the extent that resolution of that defense is potentially dispositive of any of Care Net's claims; and Care Net's non-facially frivolous claim under the Fair Housing Act," the ruling states.
The USDA's Community Facilities Loan Program doles out money in rural areas with fewer than 20,000 people. The loans can be used for water or waste disposal or for other community facilities that provide essential service to rural residents and businesses.
Religious organizations are eligible to receive USDA loans, but regulations prohibit the organizations from using the money to promote "inherently religious activities, such as worship, religious instruction, or proselytization." Nor can they use the money to build churches or other worship centers.
Care Net, a small nonprofit that runs a pregnancy resource center in Brattleboro, says it applied for a USDA loan to build a permanent facility in which the group planned to offer classes to help young, expecting parents prepare for parenthood.
Care Net says it planned to offer a "Post Abortive Teaching and Healing" program described as a "Bible centered program," and a course called "Why Am I Tempted?" which encourages students to save sex for marriage.
The organization says it should have been approved for the loan on its pregnancy course alone. It says the other, religion-focused courses would be held in the same building out of convenience.
The organization's loan application was denied after the USDA found that it failed to meet the faith-based eligibility requirements, and the appeals department backed the agency's initial decision.
"Regardless of whether the [Religious Freedom Restoration Act] requires exhaustion, parties challenging adverse decisions under the USDA's loan program are required by statute and regulation to exhaust their administrative remedies," wrote Judge Walton, who denied Care Net's motion for summary judgment on the grounds that it had exhausted its administrative remedies.
The case will be remanded to the USDA.