This Logos post entitled “The chosen people of the IRS?” points to this New York Times article that reports on a California case that has uncovered a rather remarkable preference that the Internal Revenue Service has granted to the Church of Scientology.
Apparently, Scientology parents are allowed to deduct the cost of religious education as a charitable donation under an officially secret 1993 IRS agreement despite a 1989 Supreme Court decision prohibiting such a deduction. In the original case, the Ninth Circuit ruled against the plaintiff’s request for a deduction for the cost of Jewish religious education, but when it did so, one of the judges suggested an alternative approach:

“Why is Scientology training different from all other religious training?” Judge Barry D. Silverman wrote in his opinion, adding that the question would not be answered just then because the court was not faced with the question of whether “members of the Church of Scientology have become the I.R.S.’s chosen people.” Judge Silverman then recommended litigation to address whether the government is improperly favoring one religion.
“If the I.R.S. does in fact give preferential treatment to members of the Church of Scientology – allowing them a special right to claim deductions that are contrary to law and disallowed to everybody else – then the proper course of action is a lawsuit to put a stop to that policy,” Judge Silverman wrote.

So, the plaintiffs filed another lawsuit, and during the course of discovery in that case, a subpoena was issued for a copy of the “secret agreement”, but both the IRS and the Church of Scientology resisted producing it. Stay tuned.
As an aside, actor and director Steve Martin hilariously spoofed the Church of Scientology and its heavily Southern California clientele in his underrated comedy from several years ago, “Bowfinger.”

Professor Jack Balkin, Knight Professor of Constitutional Law and the First Amendment at Yale University, posts this interesting overview and analysis on the issues involved in the U.S. Supreme Court case — Elk Grove Unified School District v. Newdow — in which Dr. Newdow, an atheist, argues that government officials’ use of the phrase “under God” in the Pledge of Allegiance violates the Establishment Clause of the United States Constitution. Professor Balkin predicts that the Supreme Court will figure out a way to leave the words in the Pledge for primarily political reasons. Although Professor Balkin is much more knowledgeable on these issues than me, I still am not sure about that. With Justice Scalia’s recusal, I think there is a real chance of a 4-4 deadlock on the Court, which would leave in place the Ninth Circuit opinion that government officials’ use of the phrase in the Pledge violates the Establishment Clause.
On a related note, this transcript is now available of a very interesting and informative disucssion that the Pew Forum hosted last week on the Newdow case, featuring Doug Laycock and Jay Sekulow.

The Health Care Blog reminds that oral argument occurred yesterday in the U.S. Supreme Court in an appeal of this Fifth Circuit decision, which involves tort claims against HMO’s under the Texas health care liability statute and the HMOs’ contention that claims under the state statute are preempted by the federal ERISA statute. The Fifth Circuit previously rejected the HMOs’ attempt to use ERISA preemption to remove the tort cases to federal court and upheld the plaintiffs’ right to litigate their claims in Texas state courts, which are rarely as corporate-defendant friendly as federal courts. The Supreme Court’s decision in this case will address a festering issue in ERISA law — that is, whether an HMO’s medical-necessity determinations are really benefits determinations that are completely preempted by ERISA.
As you might expect, the battered health care finance industry is closely eyeing the outcome of this case. The applicable ERISA provision provides a narrow basis for recovery against plans that withhold a requested level of care and a conservative measure of damages for successful plaintiffs. On the other hand, as is Texas’ tradition, Texas tort law provides injured plaintiffs with a more liberal basis for recovery and thus, exposes health plans to far greater economic risk.
So long as HMOs and other managed care units are forced to make mixed coverage and treatment decisions against a backdrop of potential tort liability, opponents of managed care believe that the managed care units would be far less willing to risk limiting or denying care that physicians and patients request. On the other hand, HMO’s and managed-care plans view an adverse result in the case as a threat to the financial security of employee benefit plans that extend health coverage to millions of workers and retirees.
Tom Mayo, the health care lawyer who is the author of the Health Care Blog, seems to think that the Supreme Court is leaning in favor of the managed care plans and federal preemption. However, the Supremes are notoriously difficult to read in cases such as this, so follow this one closely.