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Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

Pastor Can’t Defend His Tax Exemption in Suit

(CN) - A Sacramento minister cannot intervene as a defendant in a nonprofit's campaign against a tax exemption that lets "ministers of the gospel" deduct mortgage interest and property tax payments, the 9th Circuit ruled Monday.

The Freedom from Religion Foundation, a Madison, Wisc.-based group dedicated to promoting the separation of church and state, sued the Secretary of the Treasury and the IRS over the tax code in 2009. It claims that the so-called "parsonage exemption" violates the U.S. Constitution's Establishment Clause as well as California state laws.

The Rev. Michael Rodgers sought to intervene as a defendant in the lawsuit on behalf of himself and unnamed ministers in California, but a federal judge denied his petition. Rodgers argued that the federal defendants would not vigorously defend the action because of their interest in increasing tax revenues, and that they would not appeal an adverse ruling. He also claimed that the federal defendants "might, in an attempt to save the parsonage exemption from being declared unconstitutional, urge the court to construe the statutes in a narrow way that would reduce the value of the exemption," the 9th Circuit summarized.

In affirming the District Court, the three-judge federal appeals panel in San Francisco found that the pastor had failed to substantiate his fears with evidence.

"Rodgers has presented no evidence that would lead us to doubt that the federal defendants' ultimate objective is to uphold the challenged statutes," Judge Diarmuid F. O'Scannlain wrote for the court. "Accordingly, we are satisfied that Rodgers and the federal defendants have the same ultimate objective and that the 'presumption of adequate representation applies.'"

Rodgers may yet get to intervene in the suit, however. The panel vacated and remanded the portion of the District Court's decision related to his request for permissive intervention.

"The District Court concluded that because Rodgers could not demonstrate constitutional standing he failed to satisfy the independent jurisdictional grounds requirement," O'Scannlain wrote. "This requirement stems, however, from our concern that intervention might be used to enlarge inappropriately the jurisdiction of the District Courts."

Since Rodgers did not seek to bring a counterclaim in the suit, however, he was not required to "make any further showing that his intervention is supported by independent jurisdictional grounds."

"Because the district court did not apply the correct legal rule, its decision denying Rodgers permissive intervention was not an appropriate exercise of discretion," O'Scannlain wrote.

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