Full opinion text
MEMORANDUM OPINION RICHARD L. WILLIAMS, District Judge. This matter is before the Court following a remand by the United States Court of Appeals for the Fourth Circuit. Plaintiffs are nonsectarian operators of child care centers. They brought this action challenging the constitutionality of Virginia’s statutory exemption of religiously affiliated child care centers from the general licensing requirements imposed upon the operation of such centers by the Commonwealth. The action is nominally against the named Director of the Department of Social Services in his official capacity. The complaint seeks a declaration that the exemption is unconstitutional and injunctive relief compelling general application of the child care licensing provisions tb all child care centers irrespective of religious affiliation. Defendant-intervenors Grace Baptist Church, Tabernacle Baptist Church, Berean Baptist Church and The Rock Church represent a class of sectarian operators of child care centers that intervened to demonstrate the existence of free exercise rights in the exempted activities. For the reasons stated below, the Court concludes that the exemption statute, Va.Code § 63.1-196.3, violates the establishment clause of the First Amendment to the United States Constitution and enters judgment in favor of the plaintiffs. Procedural History Plaintiffs Forest Hills Early Learning Center, Inc., Academy Day Care, Inc., and Holloman Child Care Centers, Inc. filed their original complaint against William Lukhard in his official capacity in 1979. United States District Judge Warriner held that, because the secular centers’ claims of injury were pure speculation, they had no standing to sue. 480 F.Supp. 636 (E.D.Va.1979). Plaintiffs filed a second complaint in 1980, alleging “substantial injury” but the District Court again held that plaintiffs lacked standing to sue. 487 F.Supp. 1378 (E.D.Va.1980). That decision was appealed to the United States Court of Appeals for the Fourth Circuit which held dismissal on that basis erroneous and remanded for further consideration of the standing issue on an expanded record. Forest Hills Early Learning Center, Inc. v. Lukhard, No. 80-1272 (4th Cir. Jan. 9, 1981) (unpublished), listed at 642 F.2d 448. On remand, the District Court denied defendant’s motion to dismiss for lack of standing but granted defendant’s motion for summary judgment. 540 F.Supp. 1046 (E.D.Va.1982). The District Court held: (1) the exemption statute had a secular legislative purpose; (2) the statute’s primary effect was not to advance religion; (3) the statute did not foster excessive government entanglement with religion; (4) the statute did not violate the establishment clause; and (5) the statute did not violate the equal protection clause. The plaintiffs appealed the judgment of the District Court to the Court of Appeals. The Fourth Circuit affirmed in part, vacated in part, and remanded to the District Court. 728 F.2d 230 (4th Cir.1984). The Fourth Circuit held that the Commonwealth of Virginia failed to establish the existence of free exercise rights justifying the exemption as an accommodation of free exercise rights. The Fourth Circuit noted that the accommodation of free exercise rights could provide a “saving ‘secular purpose’ for the exemption under establishment clause challenge.” 728 F.2d at 241. The Fourth Circuit suggested class intervention of sectarian institutions to allow an efficient adjudication of the existence of any free exercise rights in the exempted activities, but instructed the District Court that if class intervention did not occur, it should enter judgment declaring the statute unconstitutional. Id. at 247. On remand, the District Court denied class certification and entered summary judgment for the plaintiffs. On appeal, the Fourth Circuit stated that the District Court “misapprehended the purport of our decision and nullified entirely the purposes of a remand herein,” necessitating return to the District Court once more “for the purposes stated in our earlier opinion herein.” 789 F.2d 295 (4th Cir.1986). Factual Background The Commonwealth of Virginia has regulated all child care centers since at least 1948 by requiring these centers to meet certain licensing standards. From 1968 to 1979, all persons who operated child care centers, without regard to sectarian or nonsectarian affiliation, were required to comply with the licensing requirements of Va. Code §§ 63.1-195 through 63.1-219 and the regulations promulgated thereunder. An applicant for a license under these provisions was required to submit an application to the Commissioner of the Department of Welfare containing an outline of the center’s proposed activities, facilities and services, § 63.1-197; the Commissioner was then required to investigate the applicant’s proposal and to inquire into the character, reputation and financial responsibility of the applicant, § 63.1-198. The applicant was required to grant the Commissioner reasonable opportunity to inspect its facilities, books and records and to interview its employees and agents. Id. If the Commissioner found that the applicant’s operation was reasonably conducive to the welfare of the children it might serve and that the applicant’s financial responsibility gave reasonable assurance of continued maintenance of its operation, the Commissioner was to issue a license, § 63.-1-199. The Commissioner retained the right to inspect the center and to interview any employee or customer of the center at reasonable times, § 63.1-210. In addition to complying with these statutory requirements, a person seeking a license for operating a center had to comply with regulations drawn up by the State Board of Welfare that prescribe general standards and policies for the operation of child care centers. See § 63.1-202. During the early 1970’s, the number of child care centers in Virginia increased significantly to meet the rising demand for outside-the-home child day care. As the number of centers increased, the Virginia Department of Welfare received numerous complaints that many of the centers were providing inadequate facilities, meals and supervision. Based upon an investigation, the Department determined that many centers were sacrificing the best interests of the children in order to maintain financial stability and to offer competitive prices. The Department further determined that many parents never visited a center before they enrolled their children there and that decisions concerning the choice of a center were often made without any parental knowledge or information about the centers. The Department thereupon concluded that the regulations concerning licensing and operation should be upgraded to insure that the pressures of a competitive marketplace did not intrude upon the well-being of children utilizing the service of a center. In 1976, the State Board promulgated new and more stringent regulations. These regulations imposed substantial requirements on all child care centers in many areas, including space, health, safety, and nutritional standards, child/staff ratios, administrative structure, staff applications, parental participation, recordkeeping, program requirements, financial disclosure, disciplinary practices and others. These standards were adopted in 1976 and applied to all child care centers, as had been the practice with prior regulations in the area. After the regulations were implemented a number of churches that operated child care centers opined to the Commissioner of the Virginia Department of Welfare, William L. Lukhard, that the new licensing requirements infringed their right freely to exercise their religious beliefs. In response to these complaints the Virginia legislature enacted Va.Code § 63.1-196.3, which exempts all “[c]hild care center[s] operated or conducted under the auspices of ... religious institution^]” from compliance with the licensing requirements of § 63.1-196. Those requirements remained fully applicable to all nonsectarian child care centers, and, by express statutory provision, to any sectarian centers whose sponsors nevertheless elect to be covered. § 63.1-196.3 D. Section 63.1-196.3, which is set forth in full in the Appendix to this opinion, does require the sectarian centers to meet several requirements but these requirements are minimal and consist mainly of compliance with generally applicable health and safety standards related to human occupancy and use of physical facilities. In lieu of applying for and securing a license, the sectarian institutions have merely to file with the Commissioner of the Department of Social Services an initial and thereafter annual statement of intent to operate a child care center; certify that they have disclosed to all parents or guardians of enrolled children the qualifications of the staff personnel; present documentation of their tax-exempt status and of their compliance with local health and fire ordinances and with certain staff ratio requirements; and make public disclosure of certain aspects of their operations. If an exempt center fails to file the required statement of intent, the Commissioner may take “such action as he determines appropriate,” including a suit to enjoin its operation. § 63.1-196.3 B. If a parent or guardian lodges a complaint with any local welfare, health, or fire department related to an exempt center’s failure to comply with generally applicable health and safety regulations, those local agencies may inspect the center’s facilities and take “appropriate action as provided by law, including a suit to enjoin the operation of the child-care center.” § 63.1-196.3 C. These are the only official inspection and enforcement mechanisms provided for the exempt centers. In contrast to the nonsectarian centers, no state level inspection or enforcement mechanisms beyond that related to the filing statement requirement are provided for operation of the exempt centers. A major revision of the minimum standards was initiated in 1982 when the Governor’s Regulatory Reform Advisory Board selected the Department of Social Services for review of its regulations. In response to the Board’s action, the Division of Licensing in the Department of Social Services developed a work plan for the evaluation of the Minimum Standards for Licensed Child Care Centers which was approved by the Governor in February 1983. Over the next six months, the Division reviewed the child care center standards and submitted a report to the Governor’s Advisory Board concerning them. In January 1984, the Division initiated a formal revision process by notifying all licensed centers and other interested parties that a revision of the standards was underway. It also formulated an ad hoc advisory committee of 21 members representing directors of child care centers, state and local government officials, specialists in child care development, and other interested community leaders. The ad hoc advisory committee reviewed the standards and recommended that certain standards be revised. The Division of Licensing prepared a rough draft of revisions in April 1984. That draft was reviewed by the ad hoe advisory committee, after which the Division formulated a preliminary draft for circulation to licensed centers and others for review and comment in June 1984. After the informal comment period, the Division and the ad hoc advisory committee reviewed the comments and recommended final revisions. In November 1984, the Commissioner of the Department of Social Services sent draft revised minimum standards to the State Board of Social Services recommending that the draft be made the subject of formal public comment. The Board in turn approved the draft for public comment and public hearing. After the public comment and public hearing process, the Division of Licensing revised the draft a last time, submitted it for approval to the Governor’s Regulatory Reform Advisory Board and the Department of Planning and Budget and once again to the State Board of Social Services. The revised standards were adopted by the State Board of Social Services on October 17, 1985, effective April 1, 1986. As noted by the Fourth Circuit at 728 F.2d 236, the sectarian centers are totally relieved of official state regulation in the areas of licensing itself, and of program, insurance, financial resources and management, staff qualification, and internal administration following licensure, while the nonsectarian centers are subject to extensive regulation in these areas, enforceable by state agency inspection and legal sanctions. Sectarian centers have only limited .disclosure and certification requirements and no sanctions exist as they do for nonsectarian centers. In the area of health and safety, sectarian centers are also relieved of a wide range of regulatory standards which still apply to nonsectarian centers. Sectarian centers are subject only to those health and safety standards already applicable to the general population through local and state fire, safety, and sanitation codes. Nonsectarian centers are subject to state level inspection and enforcement mechanisms while sectarian centers are subject only to the inspection and enforcement powers of local health, welfare, and fire departments acting on complaints of parents. Facing these differences in state regulation, plaintiffs brought this suit seeking a declaration that the exemption is unconstitutional and an injunction compelling application of the licensing provisions to all child care centers. Issues on Remand In its first decision on the merits, the Fourth Circuit stated that the test of whether the exemption “impermissibly favors ‘religion over non-religion’ ” is the three-part test set forth in Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971). Under that test, a statute is unconstitutional if it lacks a secular purpose, or if it has the primary effect of advancing religion, or if it fosters excessive governmental entanglement with religion. Forest Hills Early Learning Center, Inc. v. Lukhard, 728 F.2d at 238, citing Lemon v. Kurtzman, 403 U.S. at 612-13, 91 S.Ct. at 2111. The state argued that the exemption statute advanced the secular purpose of accommodating the free exercise rights of church-run child care centers. Whether the asserted purpose justified the exemption, the Fourth Circuit concluded, would be determined by “whether and to what extent the free exercise rights accommodated by the exemption did in fact exist.” Id. at 239. Nothing in the Supreme Court’s decision of Wallace v. Jaffree, 472 U.S. 38, 105 S.Ct. 2479, 86 L.Ed.2d 29 (1985), affects the Fourth Circuit’s analysis of the focal issue. In that case, the Court applied the three-prong test of Lemon v. Kurtzman to determine whether a state statute authorizing a period of silence for meditation or voluntary prayer violated the establishment clause. With respect to the'secular purpose test, the Court stated “it is appropriate to ask ‘whether government’s actual purpose is to endorse or disapprove of religion,’ ” citing Justice O’Connor’s concurring opinion in Lynch v. Donnelly, 465 U.S. 668, 104 S.Ct. 1355, 1368, 79 L.Ed.2d 604 (1984). Lynch v. Donnelly also looked to Lemon for controlling law. In her concurrence, Justice O’Connor wrote: The purpose prong of the Lemon test asks whether government’s actual purpose is to endorse or disapprove of religion. The effect prong asks whether, irrespective of government’s actual purpose, the practice on review in fact conveys a message of endorsement or disapproval. An affirmative answer to either question should render the challenged practice invalid. 465 U.S. at 690, 104 S.Ct. at 1368. It is clear from this statement that Justice O’Connor’s question is but another way of asking whether the challenged statute has a secular or a religious purpose. This Court does not read Justice O’Connor’s concurrence in Lynch v. Donnelly or the decision in Wallace v. Jaffree to reject or modify the secular purpose requirement. Moreover, the Court in Wallace v. Jaffree specifically addressed the state’s claim that the statute at issue served the secular purpose of accommodating religion. The Court concluded that that contention should be resolved by determining whether there was a need to relieve individuals from a government requirement because the requirement impeded their free exercise of religion. Wallace v. Jaffree, 472 U.S. at 57-58 n. 45, 105 S.Ct. at 2491 n. 45. That is precisely the analysis applied by the Fourth Circuit in its February 1984 decision in this case and the issue before this Court on remand. This Court concludes that Wallace v. Jaffree does not make any change in the pertinent law involved in this proceeding. Accordingly, the issue before this Court is whether and to what extent free exercise rights expressed in exempt activities would be burdened by the application of the state’s minimum standards for licensed child care centers to church-run centers and, if so, whether that burden is nevertheless justified by a compelling state interest. A. Class Certification Pursuant to the mandate of the Fourth Circuit in Forest Hills Early Learning Center, Inc. v. Lukhard, 728 F.2d 230, defendant-intervenors filed a motion to certify a class. Evidence was heard and the Court conditionally certified the class pursuant to Federal Rules of Civil Procedure 23(a), 23(b)(3), and 23(c)(1), naming defendant-intervenors as class representative. After notice was given to the class members, identified as all sectarian child care centers currently exempt under Virginia Code § 63.1-196.3 and all sectarian child care centers that have applied for such an exemption, and responses were received, the Court found that Rule 23(a) and (b) requirements were satisfied and granted class certification. The Court found that there exists a class of all religious institutions which operate or conduct child care centers, and which have been exempted from state licensure pursuant to § 63.1-196.3 of the Code of Virginia, or have filed documentation with defendant Lukhard indicating their intent to obtain such an exemption. Defendant-intervenors Grace Baptist Church, Berean Baptist Church, Tabernacle Baptist Church, and The Rock Church are members of this class. The Court found that Rule 23(a) requirements were met. First, the number of sectarian child care centers that belong to the class renders joinder of all such centers in this action impracticable, satisfying the requirement of Fed.R.Civ.P. 23(a)(1). Second, there are questions of law and fact concerning the burden that would be imposed on religious beliefs by state licensure of child care centers under the minimum standards, the state’s interest in regulating such centers, and the least restrictive means of satisfying the state’s interests that are common to the class, satisfying Rule 23(a)(2). Third, the free exercise claims and defenses of the class representatives are typical of the claims and defenses of the class, satisfying Rule 23(a)(3). Finally, the class representatives more than fairly and adequately protect the interests of the class, satisfying Rule 23(a)(4). Questions of law and fact common to the class predominate over any questions affecting only individual members, and a class action is superior to other available methods for the fair and efficient adjudication of this matter, satisfying Rule 23(b)(3). On this basis, the Court unconditionally certified the class with the defendant-intervenors, as class representative, charged with the task of presenting evidence to establish “the extent of any free exercise rights had by the sectarian institutions in the exempted activities____” 728 F.2d at 246. B. Standing The issue of plaintiffs’ standing, although resolved in an earlier stage of the proceedings, was raised by defendant-intervenors during the proceedings before this Court. As discussed in the procedural history, plaintiffs appealed to the Fourth Circuit following the District Court’s granting a motion to dismiss for lack of standing in 1980. The Fourth Circuit vacated and remanded the case, directing plaintiffs to “allege ‘specific, concrete facts demonstrating that the challenged practices harm’ them and that they ‘personally would benefit in a tangible way from the Court’s intervention,”’ citing Warth v. Seldin, 422 U.S. 490, 508, 95 S.Ct. 2197, 2210, 45 L.Ed.2d 343 (1975). That Court further noted that “submission of the proffered evidence and the particulars of the secular centers’ actual financial loss, if any, would be appropriate before a decision about standing is made.” Forest Hills Early Learning Center, Inc. v. Lukhard, No. 80-1272, slip op. at 3-4 (4th Cir. Jan. 9, 1981) [642 F.2d 448 (table) ]. After plaintiffs supported their complaint with affidavits, the state’s renewed motion to dismiss the complaint for lack of standing was denied. The District Court then upheld the constitutionality of the statute, but the Fourth Circuit vacated the summary judgment for the state, and remanded the case, concluding that “summary judgment might properly be granted to the nonsectarian plaintiffs on the present record.” 728 F.2d at 233. Although the Fourth Circuit notes that “[n]o question of standing is now raised,” that Court would not have been willing to grant summary judgment for the plaintiffs had the standing issue not been resolved in plaintiffs’ favor. The summary judgment record, including the affidavits of financial injury, was the basis of the Fourth Circuit’s decision that plaintiffs were entitled to summary judgment but for the decision to remand to allow intervention by a class of sectarian child care centers that could demonstrate the extent of any free exercise rights in the exempted activities. In the November 21 hearing on several motions filed by defendant-intervenors, this Court ruled that the issue had been resolved, noting that the requisite injury had been shown by the plaintiffs. C. Free Exercise Claims of DefendantIntervenors The tests to be applied to the churches’ free exercise claims were set forth in Forest Hills Early Learning Center, Inc. v. Lukhard, 728 F.2d at 240-41. First, “the freedom to act upon religious beliefs — to engage in religious activity — is not absolute, as is the right to hold those beliefs; activity may be curtailed in some circumstances for the protection of sufficiently compelling societal interests. Cantwell v. Connecticut, 310 U.S. 296, 300-04, 60 S.Ct. 900, 903, 84 L.Ed. 1213 (1940).” The Fourth Circuit continues, “Whether state law impinges at all upon free exercise rights first depends upon whether ‘the purpose or effect of [the] law is to impede the observance of ... religion.’ (citations omitted). Whether, in turn, the holding or active expression of particular beliefs involves the observance of ‘religion’ depends upon the sincerity of the beliefs held and the centrality of those beliefs to an identifiable religious faith or commitment; only those laws that impede the holding or active expression of sufficiently sincere and central religious beliefs impinge upon free exercise rights,” citing Wisconsin v. Yoder, 406 U.S. 205, 215-19, 92 S.Ct. 1526, 1533-35, 32 L.Ed.2d 15 (1972). The Fourth Circuit concludes, “If, under these tests, a particular law does impede ‘religious’ activity, even indirectly, it violates the free exercise clause, unless the impediment is justified by a compelling state interest arising from some substantial threat to public health, safety, peace, or order, (citations omitted) and is the least restrictive means for protecting the compelling state interest.” The Fourth Circuit also explained the issue of which activities of religious institutions are entitled to free exercise protections, noting first that “it could not be thought ... that all activities, or at least all ‘good works’ activities, of concededly religious institutions, are per se ‘religious,’ hence entitled to free exercise protections. This simply is not the law,” Forest Hills, 728 F.2d at 242-43, citing Walz v. Tax Commission, 397 U.S. 664, 674, 90 S.Ct. 1409, 1414, 25 L.Ed.2d 697 (1970). The explanation continues, “The rule instead is that some activities of undoubtedly ‘religious’ institutions may fall completely outside the realm of protected ‘religion,’ notwithstanding their undoubted legitimacy or manifest social value.” Regarding this case, the Fourth Circuit concludes, “Neither, obviously, does the whole sweep of exempt activities here lie so manifestly at the core of religious practices — such as prayer, worship, and ritual — as to be" entitled per se to protection.” 728 F.2d at 243. See also id. at 246, n. 18, where the Fourth Circuit states that this Court must make a “general identification of those activities that are ‘religious’ and those that are not under free exercise doctrine,” concededly involving “line-drawing between ‘religious’ and ‘secular’ activities of the sectarian child care center operations____” The Court notes first in considering this issue that while it is bound by the factual matters stipulated to by the parties, it is not bound by any stipulations of legal conclusions. See Dimidowich v. Bell & Howell, 803 F.2d 1473 (9th Cir.1986); Saviano v. Commissioner of Internal Revenue, 765 F.2d 643 (7th Cir.1985). Therefore, to the extent the stipulations filed by the parties constitute factual matters, the Court incorporates those into its findings of fact found throughout this opinion. The specific statements that the Court considers to be conclusions of law rather than findings of fact are those statements in paragraphs 5 and 10 that the operation of child care centers by two of the defendantintervenors is in each case a “part of its ministry.” The Court also notes that paragraphs 18-21 of the stipulations are no longer applicable to the case since Shenandoah Baptist opted out of the class. With these corrections, the Court hereby incorporates the stipulations into its findings of fact. Regarding the issue of whether the operation of child care centers by class members is a part of their respective ministries, this Court concludes that while the class members may characterize this activity as a part of their ministries, the Court is not bound to accept this characterization. Applying the tests set forth by the Fourth Circuit, the Court concludes that the operation of child care centers by these sectarian institutions is a secular, and not religious, activity. Therefore, the operation of such centers is not entitled per se to free exercise protection. The operation of a child care center is not an “active expression” of the churches’ particular beliefs regarding their ministering to their children but is merely incident to such “active expression.” Although the Court assumes, without making a specific finding, the sincerity of the beliefs of the class, the Court concludes that operating a child care center is not an “active expression” of any centrally held religious beliefs of the class. Although there are approximately 215 sectarian child care centers that are either exempted under Va.Code § 63.1-196.3 or have applied to be exempted, at least 106 church-run centers have chosen to obtain licenses rather than exemptions. While this is not conclusive, it is probative of whether operating a child care center is an active expression of centrally held religious beliefs. In addition, two defendant-intervenors — Berean Baptist and Tabernacle Baptist — applied for and accepted licenses for a period of time during the 1970’s, indicating that there was no free exercise problem at that time. Moreover, child care centers are of recent origin, their numbers increasing during the 1970’s as more mothers began to work outside the home. It would appear that sectarian groups, in establishing day care centers, were responding to a secular economic need rather than expanding the scope of their ministries. Despite this conclusion regarding the operation of child care centers by the sectarian institutions, this Court examines below the particular requirements the defendant-intervenors claim would impinge their free exercise rights. 1. The Licensing Requirement The defendant-intervenors’ central free exercise claim focuses on the licensing requirement itself. Virginia Code § 63.1-196 requires any operator of a child care center to obtain a license from the Commissioner of the Department of Social Services and to post that license in a conspicuous place on the premises. In the view of the churches, accepting a license from the state (1) requires that they acknowledge the lordship of the state over Jesus Christ and (2) gives the state the right to say whether a church-run child care center can exist. The state may regulate the secular activities of religious organizations as long as it does not infringe on the exercise of religious beliefs. Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292 (1943). The Supreme Court has recognized that the state’s power to regulate secular activities of religious organizations extends to private, religious schools. Pierce v. Society of Sisters, 268 U.S. 510, 534, 45 S.Ct. 571, 573, 69 L.Ed. 1070 (1925). Courts have upheld licensing requirements for church-run child care centers in four other states. Department of Social Services v. Emmanuel Baptist Pre-School, 150 Mich.App. 254, 388 N.W.2d 326, 330 (1986); North Carolina v. Fayetteville Street Christian School, 42 N.C.App. 665, 258 S.E.2d 459 (1979), vacated and remanded on other grounds, 299 N.C. 351, 261 S.E.2d 908, vacated and remanded on other grounds following rehearing, 299 N.C. 731, 265 S.E.2d 387, appeal dismissed, 449 U.S. 807, 101 S.Ct. 55, 66 L.Ed.2d 11 (1980); Kansas ex rel O’Sullivan v. Heart Ministries, Inc., 227 Kan. 244, 607 P.2d 1102 (1980); Kansas ex rel Pringle v. Heritage Baptist Temple Inc., 236 Kan. 544, 693 P.2d 1163 (1985); Texas v. Corpus Christi People’s Baptist Church, Inc., 683 S.W.2d 692 (Tex.1984); Roloff Evangelistic Enterprises, Inc. v. Texas, 556 S.W.2d 856 (Tex.Civ.App.1977), appeal dismissed, 439 U.S. 803, 99 S.Ct. 58, 58 L.Ed.2d 96, rehearing denied, 439 U.S. 998, 99 S.Ct. 601, 58 L.Ed.2d 672 (1978). As stated above, this Court concludes that the operation of a child care center, even by a church, is a secular activity not entitling it to free exercise protection. Thus, requiring a church-run child care center to obtain a license to participate in such a secular activity does not burden the free exercise of religion by that church. The defendant-intervenors’ views on licensing did not prevent two of them — Berean Baptist and Tabernacle Baptist — from applying for and accepting licenses for a period in the 1970’s. Neither church raised a free exercise objection to the licensure requirement during their period of licensed operation. As the pastors of these churches went through the evolutionary process of acquiring spiritual and political maturity, their institutional positions changed. Their churches went from a position of compliance with the state’s mandated licensing requirements to a view that such requirements were an intrusion by the state into their ministries and indeed an attempt by the state to license the pulpit. What prompted Berean Baptist to return its license and apparently what concerns the other churches as well was a concern that the state can arbitrarily deny a license to a church-run center. This concern is unfounded as a matter of fact and of law. There was no evidence that the state had ever arbitrarily acted to restrict the ability of church-run child care centers to operate their programs according to the mandates of their religious beliefs. Moreover, the churches’ concerns are fully addressed by the procedural, statutory and constitutional safeguards that govern the state’s conduct with respect to licensing. First, the Administrative Process Act, Va.Code § 9-6.-14:1 et seq., and the Public Participation Process govern the promulgation of standards for a licensed facility. The record establishes that the state met and exceeded these requirements when promulgating the standards now in effect. Second, the Division of Licensing may revoke or deny a license to an applicant only when it determines that the applicant does not substantially meet the requirements for a license. Third, an applicant whose license is denied or revoked is entitled to appeal that decision in accordance with the Administrative Process Act and may continue to operate during the pendency of such an appeal. Next, the applicant may appeal an adverse decision from an administrative hearing to the Circuit Court, pursuant to Va.Code §§ 63.1-180 and 63.1-213. In addition, the state’s conduct is subject to the due process requirements of the United States and Virginia Constitutions. Thus, the state is not free to arbitrarily decide that a particular church-run child care center can or cannot exist. The Court concludes that the act of licensing a church-run child care center to certify compliance with health, safety and welfare standards would not burden the church’s free exercise of religion and would not empower the state to arbitrarily deny a license to an applicant on the basis of the applicant’s religion or on any other ground. Even assuming arguendo that the operation of a child care center is a religious activity rather than a secular activity, entitling it to free exercise protection, the licensure requirement’s impediment of the free exercise of this activity is justified by the compelling state interest in protecting the health and safety of children and is the least restrictive means for protecting this interest. The state’s compelling interest in protecting the health and safety of children, particularly those under the age of five, in child care outside the home is clear. Indeed, the churches acknowledge the state’s compelling interest in this regard. The state’s licensing standards are directed to the protection and promotion of the physical well-being of children in child care outside the home. The minimum standards focus predominantly on the quality of a center’s physical facilities and environment, the provision of trained adult supervision sufficient in number for the ages and number of children at the center, the provision of nutritious meals, and the protection of children’s health. Although these standards are more detailed in breadth and scope than the requirements imposed upon exempt centers under the exemption statute, they reflect the same basic objective of promoting the health and welfare of children in child care. The churches do not object to the imposition of the requirements contained in the exemption statute or other state regulations aimed at protecting the health and safety of children. Indeed, most of the pastors who testified would not object if the requirements of the minimum standards, with the exception of the specific requirements to which they object, were imposed upon them as part of the exemption statute requirements. The licensing requirement is a reasonable way of assuring and informing consumers that all child care centers in the state meet these standards. The state’s licensing process is the least restrictive means of assuring that all children placed in child care are served in a safe, fit and nurturing environment. If a state is prohibited from acting prospectively to ensure compliance with minimum standards designed to protect children, and is only allowed to act after finding a violation of those standards, the state’s effort to prevent physical and emotional harm to children would be seriously eroded. The state would only be able to act after the damage is done. Certification of compliance with minimum standards in advance of the provision of child care services is the only way the state can prevent harm to children in child care centers. Thus, even assuming that the licensure requirement burdens the free exercise of religion, that burden is permissible under the First Amendment. 2. The Financial Disclosure Requirement Virginia Code § 63.1-198 requires the Commissioner of the Department of Social Services to investigate the financial responsibility of an applicant for a child care center license. The minimum standards require an applicant to submit “a projected budget detailing expected income and expenses at the proposed center for the first year of operation; and a complete balance sheet showing separately the current assets committed to, and current liabilities charged against, the proposed center.” See Minimum Standards, § 2.7(1) and (2). The Court concludes that requiring a church-run child care center to submit a statement of estimated expenditures and revenues and of assets and liabilities, prior to its first year of operation would not burden a church’s free exercise of religion. The information requested by the state on its one-page financial disclosure form represents a minimal intrusion into the financial affairs of one secular activity conducted by a church — its child care center— while serving the purpose of assuring a center’s financial ability to comply with the standards. Moreover, even assuming that the operation of a child care center is a religious activity, entitling it to free exercise protection, the financial disclosure requirement is justified by the state’s compelling interest in the protection of children. In addition, this requirement is the least restrictive means for protecting this interest. This requirement serves the purpose of insuring that a new child care center will be able to operate in compliance with the minimum standards for at least one year despite the heavy start-up costs of a new center. Resources must be available to assure adequate care and protection of the children during the first year of operation. As explained in a Division of Licensing Programs document, “Issuing a license to a facility that lacks the financial ability to meet the standards could pose a serious threat to the well-being of children in care. This risk can be avoided by identifying the problem before it occurs and by delaying licensure until the sponsor has the necessary resources.” The churches argue that the state does not need this information since they would subsidize their child care centers to stay in operation. This fact would support a showing of financial ability to operate, but it does not obviate the state’s concern that such ability be demonstrated. This requirement is clearly the least restrictive means for protecting the state’s interest. The financial information is requested only at the beginning of a center’s operation, unless a center demonstrates an inability to comply with the minimum standards at a later date that might be caused by financial problems. The record here indicates that the two churches whose centers were licensed during the 1970’s complied with the financial disclosure requirements without objection when they first applied for their licenses. The record also indicates that financial information was not requested after their initial application. Finally, the information requested by the state is less detailed in form and substance than the information churches are required to provide on the application for an exemption for taxation under Internal Revenue Code § 501(c)(3). Thus, the Court concludes that the financial disclosure requirements do not interfere with the free exercise of religion, serve the state’s compelling interest in protecting children by ensuring financial ability to operate and comply with the minimum standards, and are the least restrictive means for establishing this ability. 3. The Prohibition of Corporal Punishment Section 6.20 of the Minimum Standards provides: “There shall be no physical punishment or disciplinary action administered to the body such as, but not limited to, spanking; forcing a child to assume an uncomfortable position (e.g., standing on one foot, keeping arms raised above or horizontal to the body); restraining to restrict movement through binding or tying; enclosing in a confined space, box, or similar cubical; or using exercise as punishment.” The churches’ objection to this section is based on the Biblical command “Spare the rod, spoil the child.” The Court concludes that requiring a church-affiliated child care center to refrain from corporal punishment does not burden the free exercise of religion by that church. Because the operation of a child care center is a secular activity, even when conducted by a church, there is no per se entitlement to free exercise protection for all activities conducted within that operation. Even assuming arguendo either (1) that the operation of a child care center is a religious activity, or (2) that to the extent a church-run child care center believes it is commanded by the Bible to use spanking as a form of punishment, the prohibition against corporal punishment would burden that church’s free exercise of religion, the corporal punishment prohibition’s burden on free exercise is justified by the compelling state interest. The Court concludes that the state has a clear and compelling interest in protecting young children in care away from home from physical and emotional harm. That interest is served by prohibiting physical punishment which risks serious physical and mental harm and child abuse, without fostering the development of self-discipline. The record clearly establishes the state’s concerns. Spanking a child on the bottom with a hand or object can cause welts, bruises or bleeding depending on the degree of force used. If the spanking is particularly forceful, it can cause permanent, internal damage to the muscles of the buttocks. Blows to the buttocks may cause damage to bones, nerves and even the genitals. Corporal punishment teaches children that aggressive physical behavior is a viable means to resolve problems with other people. The record also reflects the state’s concern that corporal punishment is closely associated with child abuse, a serious problem that has received nationwide public attention in recent years. Indeed, the state’s concern about child abuse is so serious that it has enacted a statute requiring any adult responsible for the care of a child away from home to report any known or suspected incidents of child abuse to public authorities. Even some of the churches that object to the prohibition of corporal punishment believe that it should be used sparingly under strict limitations. Thus they have strictly limited the instances in which they permit the use of corporal punishment by requiring prior parental consent, limiting its use to designated staff and requiring the presence of another adult. Where religious practices risk or endanger the health and well-being of members of society, the state may regulate such practices to avoid the adverse health consequences. See, e.g., Kansas ex rel. Pringle v. Heritage Baptist Temple, Inc., 236 Kan. 544, 549-550, 693 P.2d 1163 (1985); Department of Social Services v. Emmanuel Baptist Pre-School, 388 N.W.2d at 334. The prohibition of corporal punishment in child care centers is precisely such an instance. The Court concludes that the state’s prohibition against corporal punishment is justified by a compelling state interest in protecting young children from physical and emotional harm. No other method of preventing the harm from occurring is available to achieve this interest. Thus, this prohibition may be applied to church-run centers despite the possible burden on their religious conduct. Moreover, a church subject to licensure could seek a variance from the Department of Social Services to permit it to use corporal punishment under appropriately defined circumstances acceptable to the state. That would permit the state to ensure that centers using corporal punishment because of their religious beliefs do so in ways that minimize the risks associated with corporal punishment. 4. Child Abuse Reporting Requirements Virginia Code § 63.1-248.3 requires, inter alia, “any person providing full or part-time child care for pay on a regularly planned basis ... who has reason to suspect that a child is an abused or neglected child, shall report the matter immediately except as hereinafter provided, to the local department of the county or city wherein the child resides or wherein the abuse or neglect is believed to have occurred.” Although the churches have raised objections about the requirement set forth in the minimum standards concerning staff training in procedures for reporting suspected instances of child abuse to the appropriate public authority, the reporting requirement is a statutory requirement that applies to exempt centers without regard to licensing requirements. Moreover, all of the churches recognize the importance of reporting instances of known or suspected child abuse to the appropriate authorities. They object only to being required to do so before they have had an opportunity to “minister” to the family involved. The Court does not see how the reporting requirement prevents churches from ministering to the families with child abuse problems. The state’s overriding interest in stopping child abuse and preventing additional harm overrides any minimal burden a church staff might suffer on account of the reporting requirements. Accordingly, the Court concludes that the reporting requirements do not burden the churches’ free exercise of religion, are justified by a compelling state interest in protecting children from physical harm and abuse, and are the least restrictive means available for protecting this interest. 5. The “Good Moral Character” Requirement Virginia Code § 63.1-198 requires the Commissioner to investigate the character and reputation of an applicant for a child care center license. In furtherance of that requirement, Section 3.1 of the Minimum Standards provides that no staff member “shall have been convicted of a felony or misdemeanor related to abuse, neglect, or exploitation of children or adults” and that all staff shall be “of good moral character and reputation.” See also Part 2, Article 1, Section 2.3 of the Minimum Standards. The churches object to these requirements because they believe in the fact that a “person can be regenerated, born again, have a new beginning.” The churches believe that they should be free to determine whether a person has been born again and should be hired in the child care center. According to the churches’ view, the minimum standards would prevent them from hiring the Apostle Paul. With one exception, the churches do not assert that any of their present personnel would be barred from employment by the minimum standards, and the Division would not object to the employment of that individual. The minimum standards encompass only felonies and misdemeanors related to the abuse, neglect or exploitation of children and adults. The churches express three fears: (1) that the state would prevent them from applying a stricter test of character than set forth in the standards; (2) that the state might prevent them from hiring an individual whom they deemed to be of good moral character but who might not be deemed to be of good moral character by the state; or (3) that the state might compel them to hire someone they believed lacked good moral character. To the extent that the churches would impose a stricter test of good moral character than the state does, there is nothing in the standards to suggest that the state could or would prohibit them, from doing so. Thus, that objection does not raise a free exercise concern. To the extent that a church might want to hire someone whose previous conduct suggests a lack of good moral character but whose subsequent conduct in the church’s view evidences good moral character because the individual has been converted and since lived an exemplary Christian life, there is nothing in the minimum standards to suggest that a church would be prevented from hiring such a person. Moreover, this Court will not presume that the Department of Social Services would apply the minimum standards so as to preclude hiring such an individual or that it would deny a request for a variance by a church-run center to hire someone the church has determined has good moral character, despite prior conduct that might suggest the contrary. The Court must also reject the contention that the good moral character standard would enable the state to compel a church-affiliated child care center to hire someone the church felt lacked good moral character. In particular, the churches fear that the state might seek to compel a church to hire a homosexual, even if the church believed homosexuality is immoral. Their fear is based on the fact that the state has a policy against discrimination against homosexuals in public school employment. The fact that the state does not discriminate against homosexuals in public school employment does not support the churches’ contention that the Division of Licensing Programs of the Department of Social Services could compel a private child care center that receives no public funding to hire a homosexual. The minimum standards contain no provision that would require a licensed center to hire someone it did not want to hire. Accordingly, the Court concludes that the good moral character requirements do not impermissibly burden the free exercise of religion by these centers. 6. Program Requirements Section 6.28 of the Minimum Standards requires licensed centers to provide “experiences which promote growth, well-being, and the appropriate development of growth and fine motor skills; language skills; cognitive skills; social and emotional skills; positive self-concept, curiosity, interest and exploration.” The churches fear that the minimum standards would permit the state to impose program content requirements that reflect a secular humanism philosophy, a philosophy they believe is incompatible with their religious beliefs. The minimum standards do not regulate the substantive content of a child care center’s program, however. The standards concerning programming and activities are designed to foster the physical and mental development of children by encouraging centers to provide a broad range of activities, without directing the content or substance of such activities. No evidence was presented at trial to suggest that the state has used the licensing process and applied the standards to direct, limit or regulate the religious content or teachings of any child care program subject to the minimum standards. None of the church-run centers that were licensed during the 1970’s indicated that the state sought to affect the religious content of their child care programs or to impose its own religious views on the programs of the church run centers. In fact, two of the plaintiffs include religious material — through Bible readings and prayer — in their programs. Therefore, the Court concludes that the risk that the state would interfere with the religious content and program of a church-run child care center is remote and speculative. Thus, there is no basis to conclude that application of the standards to church-run centers would burden their free exercise of religion or impose contrary religious views on their programs. Section 6.34(2) of the Minimum Standards requires licensed centers to include rhythm, music, and dancing in the daily activities of its program. The churches object to this provision because they are concerned that the state might require them to expose children to rock and roll music and dancing, which they believe to be sinful. The churches’ objections to these specific program standards are based on a concern about the manner in which they might be applied and not on a belief that the state does and would apply the standards to their centers in a manner that would infringe on their free exercise of religion. Thus, the churches object to the standard requiring the promotion of “positive self-concept” because they cannot know “whether the state would interpret ... these subjective standards in ways that would conflict with our disciplinary philosophy or belief in the depravity of man.” The Court finds no basis to conclude that the state would apply the standards at issue in a manner that would interfere with their belief in the depravity of man, or their teaching of that belief in their centers. Similarly, the churches’ objection to the rhythm and music standard is premised on the unfounded notion that the state can and would dictate that churches engage in musical activities they believe to be sinful. There is no evidence that the state seeks to do so through the licensing standards at issue. Accordingly, the Court concludes that the churches’ objections on these grounds do not establish a free exercise violation. Conclusion In accordance with the findings of fact and conclusions of law stated in this opinion, the Court concludes that the statute, Va.Code § 63.1-196.3, lacks a secular purpose and therefore violates the establishment clause of the First Amendment to the United States Constitution. While the statute’s avowed secular purpose was to accommodate free exercise rights in the exempted activities, the Court finds no per se entitlement to free exercise protection for the operation of child care centers by sectarian institutions. Moreover, the Court concludes that, even assuming entitlement to free exercise protection for some of the exempted activities, any burden on free exercise is justified in every case by the compelling state interest. Thus, the statute, found by the United States Court of Appeals for the Fourth Circuit to be “unconstitutionally overbroad under the establishment clause,” cannot be salvaged by defendant-intervenors’ attempt to establish free exercise rights. The Court enjoins the Commissioner of the Department of Social Services of the Commonwealth of Virginia from enforcing Va.Code § 63.1-196.3 and orders general application of the child care licensing provisions to all child care centers. An appropriate order shall enter. APPENDIX A § 63.1-196.3. Child-care center operated by religious institution exempt from licensure; annual statement and documentary evidence required; enforcement; injunctive relief. — A. Notwithstanding any other provisions of this chapter, a childcare center operated or conducted under the auspices of a religious institution shall be exempt from licensure as required by § 63.1-196. Such religious institution shall file with the Commissioner of Welfare, pri- or to beginning any such operation and thereafter annually, a statement of intent to operate a child-care center, certification that the child-care center has disclosed to the parents or guardians of the children in the center the qualifications of the personnel employed therein and documentary evidence that: 1. Such religious institution has tax exempt status as a nonprofit religious institution in accordance with § 501(c) of the Internal Revenue Code of 1954, as amended, or that the real property owned and exclusively occupied by the religious institution is exempt from local taxation. 2. Within the prior ninety days, the local health department and local fire marshal or Office of the State Fire Marshal whichever is appropriate, have inspected the physical facilities of the child-care center and have determined that the facility is in compliance with applicable laws and regulations with regard to food service activities, health and sanitation, water supply, building codes, the Virginia Fire Safety Regulations or the Uniform Statewide Building Code and local fire requirements. 3. The child-care center employes supervisory personnel according to the following ratio of adults to children: a. One adult to four children from zero to twenty-four months. b. One adult to ten children from ages twenty-four months to six years. c. One adult to twenty-five children ages six years and older. Each person in a supervisory position shall be certified by a practicing physician to be free from any disability which would prevent him from caring for such children as will be under his supervision. 4. The following aspects of the childcare center’s operations are described in a written statement provided to the parents or guardians of the children in the center and made available to the general public: physical facilities, enrollment capacity, food services, health requirements for the staff and public liability insurance. B. If a religious institution operates a child-care center and does not file the statement and documentary evidence required by paragraph A hereof, the Commissioner shall give reasonable notice to such religious institution of the nature of its noncompliance and may thereafter take such action as he determines appropriate, including a suit to enjoin the operation of the child-care center. C. Any parent or guardian of a child in a child-care center who has reason to believe that a child-care center falling within the provisions of this section is not in compliance with the requirements of paragraph A of this section may report the same to the local department of welfare, the local health department or the local fire marshal, each of which may inspect the child-care center for noncompliance, give reasonable notice to the religious institution, and thereafter may take appropriate action as provided by law, including a suit to enjoin the operation of the child-care center. D. Nothing in this section shall prohibit a child-care center operated by or conducted under the auspices of a religious institution from obtaining a license pursuant to chapter 10 (§ 63.1-195 et seq.) of Title 63.1 0f the Code. (1979, c. 425.) APPENDIX B MINIMUM STANDARDS FOR LICENSED CHILD CARE CENTERS Adopted by the State Board of Social Services October 17, 1985 Effective April 1, 1986 VIRGINIA DEPARTMENT OF SOCIAL SERVICES DIVISION OF LICENSING PROGRAMS 8007 DISCOVERY DRIVE RICHMOND, VIRGINIA 23288 Page TABLE OF CONTENTS Part I INTRODUCTION................................................ 318 Article 1. Definitions ............................................... 318 Article 2. Legal Base .............................................. 319 Article 3. Purpose .................................................. 319 Article 4. Applicability .............................................. 319 Part II ADMINISTRATION............................................. 320 Article 1. Sponsorship .............................................. 320 Article 2. Operational Responsibilities ............................... 321 Article 3. Financial Responsibilities .................................. 321 Article 4. Record Keeping Responsibilities ........................... 321 Part III PERSONNEL.................................................. 322 Article 1. General Qualifications .................................... 322 Article 2. Personnel Records ........................................ 322 Article 3. Health Requirements ..................................... 322 Article 4. Staff Training ............................................ 323 Article 5. Administrative Staff ...................................... 324 Article 6. Program Staff ........................................... 324 Article 7. Volunteers and Volunteer Personnel ....................... 325 Part IV SUPERVISION................................................. 325 Article 1. General Supervision ...................................... 325 Article 2. Staff to Children Ratio Requirements ..................... 325 Article 3. Ratio During Rest Periods ................................ 326 Article 4. Supervision During Swimming and Wading ................ 326 Part V PHYSICAL ENVIRONMENT.................................... 326 Article 1. Safety, Health and Comfort .............................. 326 § 5.3 Building Construction and Mainten