Louisville—After an eight-year legal battle, a federal judge has dismissed a lawsuit against Sunrise Children’s Services which questioned the constitutionality of the agency’s state funding.

U.S. District Court Judge Charles Simpson III ruled March 31 that the lawsuit, brought about by the American Civil Liberties Union and Americans United for Separation of Church and State, “fails to demonstrate taxpayer standing” to challenge the agency’s funding.

In dismissing the case, Judge Simpson cited last year’s U.S. Supreme Court decision in Hein v. Freedom From Religion Foundation, which stated that taxpayers could not challenge religious-based activities, such as faith-based social services, that are funded on the federal level.

The Sunrise lawsuit initially stemmed from the 1998 firing of a female employee of the agency—then known as Kentucky Baptist Homes for Children—after it was discovered she was a lesbian. Alecia Pedreira was dismissed by KBHC in October of that year, on the grounds that her sexual orientation was a violation of the organization’s employment policy.

The suit, filed in April 2000, claimed that KBHC—which changed its name to Sunrise in February 2007—should no longer receive reimbursement payments from the Commonwealth of Kentucky to provide foster care for children because of its religious affiliation and its policy which prohibits the hiring of homosexuals. The plaintiffs argued that such discrimination violated the First Amendment’s Establishment Clause.

In a written statement, Sunrise Children’s Services President Bill Smithwick noted that the lengthy legal battle has impelled the agency to enhance its services to the state’s abused and neglected children.

“This long and stressful experience has made us a better agency by forcing us to look more closely at our procedures and practices,” he said. “Without compromising our mission, we have improved service delivery to each child in our care.

Smithwick has previously noted that the contract between the state and Sunrise Children’s Services includes a provision that the agency address the spiritual needs of the children without being coercive in doing so.

“We know faith is a choice,” he added. “In order to make a choice, one must have an option. The opportunity for children to embrace faith is part of our mission.”

According to the statement released by the agency, approximately 67 percent of its funding in 2007 came in the form of reimbursements “for services provided to abused children and teenagers in Kentucky.” Smithwick has estimated that nearly $15 million of Sunrise’s $23 million annual budget is provided by state funds. That money allowed the organization to serve nearly 2,000 children through its 10 residential facilities and its foster care programs last year.

Sunrise is one of more than 50 private child care agencies in Kentucky—many of them faith-based—that have contracts with the state. Like all such agencies, Sunrise is licenced by the Kentucky Cabinet for Health and Family Services which sets specific standards for all contracted organizations.

“Our mission motivates us to care for the physical, emotional and spiritual needs of the kids charged to our care,” Smithwick noted. “We choose compassion over coercion. For us, choice trumps indoctrination and hope overcomes despair.”