The Thomas More Law Center’s near-perfect record of losing lawsuits continues, though I don’t like the basis for this one. You may recall that the TMLC sued the federal government over the bailout of AIG, claiming that because an AIG subsidiary sells insurance policies that comply with Islamic law, the bailout violates the Establishment Clause.
It’s a rather silly argument and they lost at the district court level, which granted summary judgment on the merits of the case. But the 6th Circuit Court of Appeals has now dismissed the case based on standing, ignoring the merits. The district court had ruled, based on the Lemon test, that the government had a clear secular purpose and that there was no excessive entanglement between government and religion, and that ruling was correct. 6 out of 290 AIG subsidiaries market some type of “Sharia-compliant” insurance, which really just means that it doesn’t invest in things that violate Muslim moral restrictions, like alcohol and gambling.
But the appeals court ignored the merits and ruled instead on standing grounds. I’ve argued for years that the Supreme Court’s standing doctrine is entirely artificial and unconnected to anything in the constitution and they’ve made it even worse in recent years with rulings that make the absurd distinction between legislative and executive spending. In short, a taxpayer has standing to challenge the use of public funds to support religion if that money is appropriated by Congress, but not if the spending is done by the executive branch. That was the basis for this ruling.
This standard essentially allows the government to launder money through the executive branch and eliminate any grounds for challenging that spending if it is used to support religion. So if Congress merely appropriates funds available to the executive branch for some purpose and an executive agency then gives those funds to religious groups, no one has standing to challenge the unconstitutional nature of the spending. That is an absurd legal principle, but the appeals court is bound by it until and unless the Supreme Court overturns its own precedent.
You can read the full ruling here.