The case, "New Jersey v. Shelton College," is analyzed using the briefs of both parties, the judicial opinions, and the relevant literature. The case is a classic church-state confrontation likely to reach the U.S. Supreme Court. The college is an instructional offshoot of the fundamentalist Bible Presbyterian Church. In 1971, after a protracted legal battle, the New Jersey Board of Higher Education removed the license of Shelton College to award degrees in the state since Shelton failed to meet the Board's minimum standards. The college moved its operation to Florida where it received licensure. However, in 1979 after submitting an incomplete application for New Jersey licensure, Shelton reopened its New Jersey campus. The Board successfully enjoined Shelton in state court, but Shelton sent to federal court and won the right to recruit students, offer credit-bearing courses, and award degrees while the case proceeded through the state court system. In 1979 the college initially submitted a significant portion of the material required as part of the licensure process, but refused to provide requested information on financial stability or on the qualifications of its faculty. The college asserted that its religious beliefs would not permit it to participate in the state licensure process, and that the process unlawfully infringed upon its constitutional rights. However, Shelton College was seeking to offer in New Jersey baccalaureate degree programs in such nonsectarian disciplines as English, history, business education, and the natural sciences. Federal cases providing a basis for the state court ruling, and the federal district court proceedings are reviewed. (SW)