I wish to briefly note some of the relevant case law. Interestingly, it's difficult to know where to begin, and the holdings one begins with determine which direction an argument goes. So I will try to avoid suggesting an argument here (but I won't be successful).
In
O'Hair v. Blumenthal (1978), federal district court dismissed a challenge to the federal statutes that established “In God We Trust” as the national motto, mandated that the motto be imprinted on currency, and prescribed criminal penalties for removal of the motto from currency. The district court, of course, cited the Ninth Circuit ruling in
Aronow v. United States (1970), which had
. . . held that the "national motto and the slogan on coinage and currency 'In God We Trust' has nothing whatsoever to do with the establishment of religion. Its use is of a patriotic or ceremonial character and bears no true resemblance to a governmental sponsorship of a religious exercise." 432 F.2d at 243. From this it is easy to deduce that the Court concluded that the primary purpose of the slogan was secular; it served a secular ceremonial purpose in the obviously secular function of providing a medium of exchange. As such it is equally clear that the use of the motto on the currency or otherwise does not have a primary effect of advancing religion.
With this language denying that the use on the motto on currency “a primary effect of advancing religion,” this district court, and the Ninth Circuit before it, indicated that the challenged laws that require the motto be imprinted on currency pass the
Lemon Test.
A Fifth Circuit
Per Curiam affirmed the district court's holding. The Supreme Court did not grant cert.
The
Lemon Test, which has come to be employed for determining whether a statute violates the Establishment Clause, consists of 3 prongs: (1) the statute must have a secular legislative purpose; (2) the primary effect of the statute must neither advance nor inhibit religion; and (3) the statute must not result in excessive government entanglement with religion (e.g., with internal disputes within a religion or denomination). To fail in any one of these prongs renders the statute unconstitutional. (I disagree that the statutes challenged in
O'Hair pass the first prong of the
Lemon Test. I believe these statutes should be held unconstitutional. But my opinion means nothing.)
In any event, preceding
Lemon were the rulings in
Abington School District v. Schempp and
Engel v. Vitale, where the Court found, respectively, that school-sponsored Bible readings and recitation of state-composed prayer violate the Establishment Clause
. Note that these cases involve a direct government sponsorship or mandate. It certainly seems to me that it can be readily argued that a state law requiring the government-composed phrase “In God We Trust” to be plastered on school classroom walls runs afoul of the Establishment Clause in the same way as did the school-sponsored Bible readings and subjection to state-composed prayers. But, more than that, WTF is the “secular legislative purpose” of such a law, as required by prong (1) of the
Lemon Test?
The Court has also formulated the “coercion test” and the “endorsement test” for purposes of determining Establishment Clause violations. In
Newdow v. Congress (2002) (
Newdow I, the last decision to rule on the merits), the Ninth Circuit availed itself of all 3 tests in analyzing the constitutionality of the 1954 law that added the words “under God” to the Pledge of Allegiance, finding this law to violate the Establishment Clause. Again, it would seem readily argued that the voluntary recitation of the Pledge of Allegiance is no more coercive than the same captive students being subjected to the phrase “In God We Trust” in every classroom. The Supreme Court reversed the Ninth Circuit opinion on grounds of Newdow's lack of standing (Newdow, suing in the capacity of next friend of his child, was the non-custodial parent of his child, and therefore lacked standing).
So that is the briefest rundown of the case law. In all of the above decisions, one can find further avenues of inquiry with regard to the constitutionality of this state law.