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Click here for the full text of this decision FACTS:According to the opinion by the Texas Supreme Court, the State of Texas goes to great lengths to ban “diploma mills,” defined as “institution[s] of higher education operating without supervision of a state or professional agency and granting diplomas which are either fraudulent or because of the lack of proper standards worthless.” To achieve this purpose, Subchapter G of the Higher Education Coordinating Act of 1965, codified as Chapter 61 of the Texas Education Code, denies a “private post-secondary educational institution” use of certain terminology common to graduate education unless it has a certificate of authority from the Texas Higher Education Coordinating Board. Texas Education Code �61.313 restricts what an institution can call itself. As originally enacted in 1975, �61.313 bans institutions without a certificate of authority the right to use the terms university, college and several other terms. HEB Ministries, Inc., a church in Fort Worth, operates a school, Tyndale Theological Seminary and Bible Institute, which was founded in the early 1990s to offer a biblical education in preparation for ministry in churches and missions. By 1999, its campus consisted of a library, four or five classrooms, administrative offices, a small bookstore and a computer department, and its enrollment was 300-350 students, with more than three-fourths in correspondence courses. Tyndale is a “private postsecondary educational institution” as defined by Subchapter G. Tyndale’s 1997-1998 course catalog stated: “At TYNDALE our focus is upon you � the professional minister or motivated layman who wishes to make a difference for Christ in our world. You are the most important part of the TYNDALE equation. Our job is to meet your needs � to meet you half-way with quality Bible courses that help you in your ministry endeavor.” The catalog also contained a lengthy “Doctrinal Statement” setting out Tyndale’s positions on issues of faith. The catalog listed 172 courses, 162 of which were in religious subjects. Of the other ten, three were in general education and seven were in typing, word processing and use of the Internet, offered by the “Department of Theological and Biblical Research.” The catalog offered 20 diplomas, all in religious subjects. Tyndale’s catalog offered no “diploma” in any secular subject and no “degree” of any kind, but it characterized programs of study required for a diploma as equivalent to programs of study required for a degree at the same level. For example, the catalog referred to its “Diploma Of Theological Studies” program as a “bachelor equivalent program” and “bachelor equivalent course of studies,” and the “Master of Arts Level Diploma” in “Counseling” as a “Masters Level Program.” The course catalog did not state that Tyndale’s diplomas were the equivalent of college degrees, but neither did it state that they were not; it was silent on the subject. The catalog stated that Tyndale and Louisiana Baptist Theological Seminary were “going forward with parallel programs [in prophetic studies] and exchange of credits between the two institutions,” but did not otherwise say that Tyndale academic credits could be applied toward earning degrees. In 1998, Tyndale had never been accredited by an agency recognized by the coordinating board and had never obtained a certificate of authority from the board. Tyndale never sought accreditation or a certificate of authority for what it describes as “doctrinal reasons.” In its 1997-1998 course catalog, Tyndale described its position on accreditation as follows: “Many seminaries are on shifting sands. They feel they must impress the world or the culture with their intellectualism. Thus, some schools are spending large sums of money on appearance and are no longer focusing on the substance strong theology, solid Bible courses, practical language exegesis, etc. “What validates TYNDALE? TYNDALE believes it is affirmed by its Board of Advisors, Board of Governors, the students attending and, the world-class Guest Faculty who give our students the best of academics and the greatest training in the spiritual message of the Scriptures. But again, many schools seek RECOGNITION and AFFIRMATION from the state, from secular associations or professional groups that really have no business meddling in biblical matters. “The approach of many seminaries and Bible schools is obsolete and antiquated. They are still trying to be, as they call it,”traditional’ schools. But mainly, they simply try to keep up with the Joneses. They attempt to look and act like secular universities. But in reality, a school like TYNDALE, and other schools with our convictions, are the ones that are traditional, not the other way around.” At commencement exercises on June 26, 1998, Tyndale recognized graduates with 34 awards, listed in the program with titles such as Certificate of Biblical Studies; Bachelor Level Diploma in Biblical Studies; Master of Arts (MA); and Doctor of Ministries. In conferring these awards, Tyndale did not use the word “degree.” Nevertheless, the commissioner of higher education sent Tyndale a letter dated July 22, 1998, which stated: “As you know, the Texas Education Code, Chapter 61, Subchapter G, requires an institution to have a certificate of authority to grant degrees, credits applicable to degrees, or to use specific academic terminology. I have determined that Tyndale Theological Seminary & Biblical Institute is violating this statute. Under Section 61.316, the Commissioner must assess penalties for violations. Those penalties may range from $1,000 to $3,000 for use of a protected term in the institution’s name and from $1,000 to $5,000 for awarding or offering to award degrees. Each degree awarded or offered constitutes a separate offense.” The commissioner found that: Tyndale met the definition of a private postsecondary institution in Texas as found in �61.302(2); Tyndale was informed in a letter from the coordinating board dated Sept. 16, 1991, the law requires it must hold a certificate of authority from the coordinating board to grant degrees, grant credits applicable to degrees or use protected terminology; and on or about June 26, 1998, Tyndale awarded six undergraduate certificates, one associate degree, eight bachelor’s degrees, two diplomas of Christian Studies, 11 master’s degrees, and six doctoral degrees for a total of 34 degrees; and Tyndale was using the protected term “seminary” in its name. Therefore, the commissioner assessed an administrative penalty of $173,000, consisting of 34 violations of granting a degree without authority at $5,000 each and one violation of using a protected term at $3,000. The commissioner also ordered Tyndale to immediately cease its actions “in violation of state law” and contact the board within 20 days of the receipt of the letter with plans to correct its actions. “At minimum,” the commissioner stated, “those plans must include the following: you must (1) cease using the term ‘seminary,’ or any other protected term, in the name of your institution; (2) cease awarding or offering to award degrees; (3) cease offering credit towards degrees; (4) inform your graduates, students, and potential students by letter that you have no degree granting authority; and (5) offer by letter full refunds to all graduates and students. The content of the letter informing your students of your status and the offer of refunds must be submitted to the Coordinating Board for approval prior to its distribution. Failure to contact us with your plans to correct your actions will result in our referring this matter to the Office of the Attorney General for injunctive and any other relief allowed by law.” Tyndale did not appeal the board’s decision. Instead, HEB Ministries sued the board, the commissioner and the attorney general for a declaratory judgment that ��61.304[47] and 61.313(a), as applied to a school like Tyndale, violated the establishment clause and free exercise clause of the First Amendment to the U.S. Constitution as well as Art. I, �6, of the Texas Constitution. HEB Ministries also sought attorneys’ fees. The coordinating board and the commissioner counterclaimed for collection of the previously assessed $173,000 administrative penalty, an injunction prohibiting HEB Ministries from engaging in the conduct for which it had been sanctioned and attorneys’ fees. At some point, Southern Bible Institute and Hispanic Bible Institute, two other Texas institutions, intervened as plaintiffs. Both sides moved for summary judgment. In their motion, the plaintiffs (including the intervenors) argued, in addition to the allegations in HEB Ministries’ petition, that ��61.304 and 61.313 also violate the First Amendment’s free speech clause and Art. I, �8, of the Texas Constitution. The trial court held that �61.313′s regulation of the word “seminary” violated the First Amendment and Art. I, ��6 and 8 of the Texas Constitution. In all other respects, the trial court granted summary judgment for the defendants. It ordered HEB Ministries to pay the state $170,000, the penalty assessed for granting 34 degrees, and ordered the plaintiffs to pay $34,781 in attorneys’ fees. The court also enjoined HEB Ministries from awarding degrees, as defined in Subchapter G, or representing that Tyndale’s educational credits would be applied toward a degree at another institution, until it obtained a certificate of authority from the board. The 3rd Court of Appeals held that neither ��61.304 nor 61.313 violated the First Amendment or Art. I, ��6 and 8, of the Texas Constitution. Thus, it reinstated the $3,000 administrative penalty against HEB Ministries for Tyndale’s use of “seminary,” and upheld the $170,000 administrative penalty for granting degrees. The court remanded the case for entry of a permanent injunction consistent with its opinion. The Texas Supreme Court granted the plaintiffs’ petition for review. HOLDING:Reversed and remanded. The establishment clause prohibits any “law respecting an establishment of religion,” the court noted. Fundamentally, the clause means that neither a state nor the federal government can set up a church. Neither can pass laws which aid one religion, aid all religions or prefer one religion over another. Since the government cannot determine what a church should be, it cannot determine the qualifications a cleric should have or whether a particular person has them. Likewise, the court stated, the government cannot set standards for religious education or training. The state, the court stated in outlining the neutrality requirement of the establishment clause, “must confine itself to secular objectives, and neither advance nor impede religious activity.” The board asserted that Subchapter G meets the neutrality requirement. In the sense that Subchapter G applies to institutions across the board, the court agreed that it is neutral; that is, it does not single out religious programs for special treatment. But the fact that Subchapter G burdens all private postsecondary institutions, the court stated, does not lessen its significant, peculiar impact on religious institutions offering religious courses of study. The board, the court stated, cannot avoid the constitutional impediments to setting substantive standards for religious education by making the standards applicable to all educational institutions, secular and religious. Subchapter G, the court stated, expresses a preference for one manner of religious education over another. The religious school that chooses to educate in the manner of secular schools may use education terminology with the state’s approval. Other religious schools cannot. The board’s standards, adopted as authorized by Subchapter G, also require academic freedom and faculty independence inconsistent with a doctrinal statement like Tyndale’s that is at the core of its mission. The court held that ��61.304 and 61.313(a) violated the establishment clause and Art. I, �6 of the Texas Constitution as applied to a religious institution’s programs of religious instruction. The court also concluded that �61.313′s restriction on the use of the name “seminary” by schools offering only religious programs of study violated the free exercise guarantees of the First Amendment and the Texas Constitution. Finally, the court concluded that �61.304′s restriction on the words that a religious institution may use to refer to completion of religious programs of study was so broad that it violated the free exercise guarantees of the First Amendment and the Texas Constitution. The state may not deny a religious program of study clearly denominated as such the use of all words capable of describing educational achievement, the court stated. OPINION:Hecht, J., announced the judgment of the court and delivered the opinion for the court with respect to Part I, in which Jefferson, C.J., and O’Neill, Wainwright, Brister, Medina, Green, and Johnson, JJ., joined, and with respect to Part III-B, in which Jefferson, C.J., and O’Neill, Brister, Medina and Green, JJ., joined, and an opinion with respect to Parts II, III-A, and III-C, in which O’Neill, Brister and Medina, JJ., joined. Willett, J., took no part in the decision of the case. CONCURRENCES/DISSENTS:Wainwright, J., filed an opinion concurring in part and dissenting in part, and concurring in the judgment, in which Johnson, J., joined. “I conclude the State has not carried its burden of showing that its regulation of this commercial speech directly advances its interest because the regulation is more extensive than necessary to serve the Legislature’s legitimate purposes.” Jefferson, C.J., filed an opinion concurring in part and dissenting in part, in which Green, J., joined. “Because the statute permissibly regulates commercial speech, and because it presents no Establishment Clause or Free Exercise Clause violation, I respectfully dissent from the part of the Court’s judgment that concludes otherwise.”

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