Circuit Judge John Schmidt of the Seventh Illinois Judicial Circuit Court in Springfield (Sangamon County), ruled yesterday that the state of Illinois was not obligated to renew its contracts with Catholic Charities to continue providing foster care and adoption placement services in the state. Granting summary judgment to the state and denying it to Catholic Charities, Judge Schmidt ended up applying a simple principle of government contract law: no individual has a right to contract with the state.
Surprisingly, the court issued its brief memorandum decision in Catholic Charities v. State of Illinois, 2011-MR-254 (August 18, 2011), just a day after hearing oral argument on the motions for summary judgment filed by both parties.
According to Judge Schmidt's opinion, Catholic Charities had been providing such services under contract with the state for forty years, in a series of one-year contracts subject to annual renewal. On June 1, the recently-enacted Illinois Religious Freedom and Civil Union Act went into effect. Under this law, same-sex couples can register with the state to achieve a legal status of civil union partners, having all the state law rights of married couples. In the period between enactment and going into effect, there was considerable discussion within the government and in the press about whether Catholic Charities' child welfare agencies would be entitled to continue refusing to deal with same-sex couples once such couples could become civil union partners and maintain their state contractor status, and renewed discussion of whether CC's existing policies violate the state's anti-discrimination laws that cover sexual orientation.
Concerned about the possibility they might lose their contracts, four dioceses of Catholic Charities (Springfield, Peoria, Joliet and Rockford), represented by a Catholic litigation group, the Thomas More Society, brought suit seeing a court order that their contracts be renewed. Sure enough, a month later as the contracts came up for renewal, the state's Department of Children and Family Services declined to renew foster care contracts with these dioceses, pointing out that categorically excluding a class of potential foster parents violates federal requirements for case-by-case evaluation of what is in the best interest of the children. ACLU and Lambda Legal intervened on behalf of the state. Cross-motions for summary judgment were filed, and Judge Schmidt heard argument August 17.
According to newspaper reports, Schmidt's main concern at oral argument was whether a plausible argument could be made that Catholic Charities had obtained a property interest in its continued status as a state contractor, thus requiring some sort of due process before the state could refuse to renew the contracts, but clearly he was not satisfied by the arguments he heard, and so needed little time to reach his conclusion, writing on August 18: "The Plaintiffs do not have a legally recognized protected property interest in the renewal of its [sic] contracts for foster care and adoption services. There are no statutory terms creating a property interest in the Plaintiffs' contracts. Thus, the Plaintiffs' contract with the State, which is renewable annually, is a desire of the Plaintiffs to perform their mission as directed by their religious beliefs. The fact that the Plaintiffs have contracted with the State to provide foster care and adoption services for over forty years does not vest the Plaintiffs with a protected property interest. The Plaintiffs invite this Court to extend the term "legally protected property interest" to those whose state contracts are not renewed. The Court declines this invitation. No citizen has a recognized legal right to a contract with the government."
Thus, concluded Schmidt, the state can refuse to renew the contracts. The court dissolved the preliminary injunction it had granted on July 12, 2011, to maintain the status quo pending the outcome of the case, so the state is now free to carry out what it had announced it would do in July, and immediately to shift state contracts for foster care and adoption to agencies that are willing to comply with state and federal requirements in administering such programs. This does not necessarily mean that Catholic Charities can't continue to provide these services by raising its own money, but merely that they would no longer be doing so with taxpayer money subsidizing their activities.
Judge Schmidt noted that because the case had been resolved on this basis, there was no need to address the plaintiffs' claim that the refusal to renew their contracts violated their religious freedom rights under state law. The case leaves open the question whether Catholic Charities would be violating state law if, operating with charitable funds, it continued to refuse to deal with legally united same-sex couples. That question did not have to be resolved by the judge to decide whether the state had a right to refuse to renew the contracts.