Thursday, November 26, 2020
The Supreme Court yesterday granted an application to temporarily halt the enforcement of New York's "red zone" and "orange zone" occupancy limits to the Roman Catholic Diocese of Brooklyn and Agudath Israel of America, the plaintiffs challenging the restrictions. The ruling means that New York cannot apply its red- and orange-zone restrictions to the plaintiffs as their case works its way through the lower courts. (It's currently on appeal at the Second Circuit.) But it also telegraphs the way the Court will rule when the case eventually comes to it on the merits.
The 5-4 ruling reflected the conventional divide on the Court (with Chief Justice Roberts siding with the three progressives). It also revealed a rift between Justice Gorsuch and Chief Justice Roberts, as Justice Gorsuch took aim at the Chief for his earlier opinion in South Bay. The ruling illustrates the impact of Justice Amy Coney Barrett: it almost certainly would've come out the other way if Justice Ginsburg were still on the Court.
The Court held that New York's 10- and 25-person occupancy restrictions (the red- and orange-zone restrictions, respectively) likely violate the Free Exercise Clause. The per curiam opinion said that the zones "single out houses of worship for especially harsh treatment" in comparison to secular "essential" businesses like "acupuncture facilities, camp grounds, garages[, and] plants manufacturing chemicals and microelectronics and transportation facilities." The Court said that because the restrictions are not "neutral" and of "general applicability," they must satisfy strict scrutiny, and that they failed. The Court noted that New York's zones are far more restrictive than other COVID-related regulations that the Court has considered, that "there is no evidence that the applicants have contributed to the spread of COVID-19," and that the state could achieve its objective (to minimize the risk of transmission) with less restrictive means, for example, tying the occupancy limits to the size of the synagogue or church (rather than setting the limit at a particular number).
Chief Justice Roberts dissented, arguing that an injunction isn't necessary, because the state lifted the red- and orange-zone restrictions on the plaintiffs.
Justice Breyer dissented, joined by Justices Sotomayor and Kagan, arguing that the injunction isn't necessary and that the plaintiffs didn't meet the requirements for an "extraordinary remedy."
Justice Sotomayor dissented, too, joined by Justice Kagan, arguing that the state treats synagogues and churches more favorably than similar secular activities (like concerts), and that the state's "essential services" that enjoy more favorable treatment are distinguishable based on the science.
Tuesday, November 10, 2020
The Supreme Court hears arguments today in the latest challenge to the Affordable Care Act--a case that could take down the entire Act. Here's my preview, from the ABA Preview of United States Supreme Court cases, with permission:
The universal coverage provision is once again at the Supreme Court. This time, challengers argue that the provision is not a valid exercise of Congress’s taxing authority, because the provision lacks a critical feature of a “tax”: it cannot raise revenue for the government. (After all, the penalty for noncompliance is zero.) Moreover, challengers argue that because the universal coverage provision is so integrated with the rest of the Act, the provision’s invalidity also means that the rest of the Act must fall, too. But before we even get to these issues, the Court will first consider whether the challengers even have standing to bring their claims.
- Do individual and state plaintiffs have standing to challenge the minimum-coverage provision in the Affordable Care Act?
- Did Congress render the minimal-coverage provision unconstitutional by setting the tax penalty for individuals who lack health insurance to zero?
- If the minimal-coverage provision is unconstitutional, is the rest of the Affordable Care Act unconstitutional, too?
In 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA). The central goal of the Act was to extend quality and affordable health insurance to all Americans. In order to achieve this goal, the ACA included a host of new policies and regulations of the health-insurance market.
Three of those policies stand out. First, the “guaranteed-issue provision” prohibits health-insurance companies from denying coverage for pre-existing conditions. Second, the “community-rating provision” bars health-insurance companies from charging individuals higher premiums because of their health conditions. And third, the “universal coverage provision” (or “individual mandate”) requires all individuals to obtain health insurance, or to pay a tax penalty. 26 U.S.C. § 5000A.
The three provisions complement each other in order to achieve the goals of the Act. The guaranteed-issue provision ensures that all individuals have access to health insurance. The community-rating provision ensures that no individuals pay an outsized rate based on their health conditions. And the universal-coverage provision helps to ensure that health-insurance rates are affordable, by expanding the pool of insured individuals who pay into the health-insurance system, including healthy, but previously uninsured, individuals. These provisions form a “three-legged stool” that sits at the center of the Act.
But the ACA contains a web of other reforms and regulations, too, all designed to help extend quality and affordable health insurance to all Americans. Most notably, the Act provides federal financial incentives to states to expand their Medicaid programs; it expands access to employer-based health insurance; it creates health-insurance marketplaces ( “exchanges”) where individuals can shop for insurance; it provides subsidies to insurance companies and individuals to help keep rates affordable; it requires health-insurance plans to provide certain minimal benefits; it allows young adults to stay on their parents’ health insurance plans until age 26; and more. The ACA also contains a number of provisions that are designed to expand access to quality and affordable healthcare and improve public health outcomes, even if they are not directly related to the health-insurance market.
Opponents of the ACA immediately sued to stop the Act. They argued, among other things, that Congress lacked authority to enact the universal-coverage provision, and that the provision was therefore unconstitutional.
The Supreme Court disagreed. A sharply divided five-to-four Court ruled that while Congress could not enact the provision under its Commerce Clause authority, Congress could enact the provision under its taxing authority. NFIB v. Sebelius, 567 U.S. 519 (2012). In other words, the Court held that Congress could not require individuals to purchase health insurance as a free-standing regulatory mandate. But it said that Congress could impose a tax penalty against individuals who failed to comply with the provision.
In explaining why Congress could enact the universal coverage provision under its taxing authority, Chief Justice John Roberts, writing for the Court, noted that the tax penalty for noncompliance with the universal coverage had all the indicia of valid tax. He observed that the provision was located in the Internal Revenue Code, and that the amount of the penalty was “determined by such familiar factors as taxable income, number of dependents, and joint filing status.” Most importantly, he noted that the provision “yield[ed] the essential feature of any tax: It produce[d] at least some revenue for the Government.” As a tax, Chief Justice Roberts observed, the provision “is not a legal command to buy insurance,” but instead “a condition—not owning health insurance—that triggers a tax.”
Before and after the ruling, opponents of the ACA waged several attempts to revoke the Act through legislation. These efforts failed. But in 2017, in direct response to the ruling, opponents in Congress, through the Tax Cuts and Jobs Act (TCJA), succeeded in undermining the universal-coverage provision indirectly, by setting the tax penalty for noncompliance at zero dollars.
After Congress enacted the TCJA, two private individuals and a group of states sued the government, arguing that the TCJA rendered the universal-coverage provision unconstitutional. They claimed that by zeroing out the tax penalty for noncompliance, Congress transformed the universal-coverage provision from a valid tax (under NFIB) to an unconstitutional direct requirement to buy health insurance (also under NFIB). Moreover, they argued that because the universal-coverage provision worked in concert with the many other provisions of the ACA, the universal-coverage provision was not “severable” from the rest of the Act, and the rest of the Act must necessarily fall, too.
The government sided with the plaintiffs on the universal-coverage provision, but adopted a somewhat more nuanced position on severability. In particular, the government maintained that the universal-coverage provision was inseverable only as to the guaranteed-issue and community-rating provisions, and so only those two additional components of the ACA must fall. Because the government sided with the plaintiffs, a group of states and the District of Columbia, and later the U.S. House of Representatives, intervened to defend the Act.
The district court ruled for the plaintiffs. The court held that the universal-coverage provision was no longer valid as a tax, and that it was inseverable from the rest of the Act. The court struck the entire ACA, but stayed the ruling pending appeal.
The Fifth Circuit agreed that the universal-coverage provision was no longer valid as a tax, and therefore exceeded Congress’s authority. But it remanded the case to the district court for further consideration of the severability question. The appeals court instructed the lower court to give more attention to the legislative intent behind the TCJA, and to more carefully consider how particular portions of the ACA were linked to the universal-coverage provision.
This appeal followed.
The case includes three distinct issues. Let’s take a look, one at a time. (The individual and state plaintiffs briefed a fourth issue—that the Court should uphold the district court’s nationwide injunction against the ACA—but the Court did not certify that question for appeal. We’ll refer to the parties defending the ACA, the states, the District of Columbia, and the U.S. House of Representative, together as the “petitioners.”)
In order to sue in federal court, plaintiffs must demonstrate that they have “standing.” This requires a plaintiff to show (1) that the plaintiff suffered a direct and concrete harm (2) that was caused by the defendant’s actions and (3) that would be redressed by the plaintiff’s requested relief in court. Only one plaintiff needs to demonstrate standing for a case to move forward, so this case could proceed if any of the individual plaintiffs or the states have standing.
The petitioners argue that the plaintiffs (now the respondents) lack standing. As to the individual plaintiffs, the petitioners claim that the universal-coverage provision, as altered by the TCJA, does not harm the plaintiffs, because it doesn’t require them to do anything, and because it doesn’t penalize them if they don’t buy insurance. The petitioners say that the zeroed-out universal-coverage provision simply gives individuals a choice—buy insurance or don’t—but that it doesn’t impose any consequence. They say that any harm is therefore self-inflicted, and doesn’t count for standing purposes. As to the states, the petitioners point out that the universal-coverage provision doesn’t even apply to them. Moreover, the petitioners maintain that they simply have failed to introduce any evidence that the zeroed-out universal-coverage provision itself inflicts any injury on them at all (even if other provisions of the ACA may increase their costs).
The plaintiffs argue that they have standing. The individual plaintiffs contend that they have standing, because the universal-coverage provision, even without a penalty, still requires them to purchase insurance—an actual harm for standing purposes. The states claim that the universal-coverage provision, even without a penalty, imposes several costs on them: increased enrollment in their Medicaid programs (because some individuals will enroll in Medicaid to comply with the universal-coverage provision); increased reporting and regulatory requirements under other provisions in the ACA; and increased costs in providing state employees with health insurance in order to comply with the ACA’s employer mandate. The states say that all of these costs count toward standing, notwithstanding the petitioners’ unduly narrow focus on the lack of particular harms that derive from the universal-coverage provision.
The government argues that the individual plaintiffs have standing. (The government does not make an argument one way or another about the states’ standing.) The government claims that the individual plaintiffs are injured by the ACA’s provisions that regulate health-insurance plans (the government calls these “insurance reform provisions”), because these provisions limit the individual plaintiffs’ choices and increase their costs in the health-insurance market. The government says that the individual plaintiffs can leverage this harm to challenge the universal-coverage provision, because the insurance reform provisions are inseverable from the universal-coverage provision, and all other portions of the ACA, because they, too, are inseverable. But the government maintains that the Court can only grant relief with regard to those provisions that actually injure the individual plaintiffs—relief that would redress only the individual plaintiffs’ harms. The government urges the Court to rule the entire Act unconstitutional, but then to remand the case “for consideration of the scope of appropriate relief redressing the plaintiffs’ injuries.”
Constitutionality of the Universal-Coverage Provision
The petitioners argue that the universal-coverage provision is still constitutional, even after Congress reduced the tax penalty to zero. They say that while the provision may encourage individuals to buy insurance, it doesn’t require anyone to do anything. They contend that this kind of action is well within Congress’s authority, either as a precatory statement, or as a suspended exercise of its taxing power (a placeholder provision in the law that is currently dormant, but that Congress could reactivate in the future). And they note that Congress did not revoke the provision; it simply zeroed out the penalty. The petitioners claim that the Fifth Circuit’s ruling to the contrary—that Congress transformed the universal-coverage provision into an invalid exercise of its Commerce Clause authority—flies in the face of NFIB itself, which says that the courts must “construe a statute to save it, if fairly possible.”
The plaintiffs and the government respond that the universal-coverage provision is no longer constitutional under Congress’s taxing authority, because it no longer raises revenue. As the government says, “Under NFIB’s functional approach, a statute that imposes no tax liability on anyone cannot be sustained as a tax.” The plaintiffs and the government say that the provision now reads most naturally to directly require individuals to buy insurance. They contend that this is exactly what the Court in NFIB ruled that Congress could not do.
The petitioners argue that even if the universal-coverage provision is no longer constitutional, it is severable from the rest of the Act. They note that when Congress zeroed-out the tax penalty in the TCJA, it left the rest of the Act in place. According to the petitioners, this shows that Congress intended only to remove the enforcement mechanism for the universal-coverage provision, but not to undermine the rest of the ACA. (Importantly, the petitioners focus on congressional intent in 2017, when it enacted the TCJA, and not 2010, when it enacted the ACA.) The petitioners maintain that, as a practical matter, the rest of the ACA has continued to operate since 2017, even without the tax penalty.
The individual and state plaintiffs and the government counter that the universal-coverage provision is inseverable from the rest of the ACA, because Congress enacted the provision as an essential part of the larger Act. They say that the universal-coverage provision is an indispensable part of the “three-legged stool” (along with the guaranteed-issue and community-rating provisions), and that the many and myriad other provisions in the Act cannot operate without the Act’s core three-legged stool. (In contrast to the petitioners, the individual and state plaintiffs emphasize congressional intent in 2010 and before the TCJA. They note, however, that the TCJA retained statutory findings as to how these provisions work together to achieve the goals of the Act.)
This case is easily one of the most important cases of the Term. That’s because it tests the entire ACA—a sweeping piece of legislation that comprehensively restructured the health insurance market in the United States and brought quality and affordable health insurance to millions of individuals. A ruling for the challengers could mean the end for many or all of the ACA’s reforms, and could result in millions of individuals losing health insurance and other protections and benefits under the Act. Given that Congress has not offered a viable alternative to the ACA, a ruling for the challengers would likely return the health-insurance market to its pre-ACA status.
This is all the more significant in the middle of a pandemic, with an illness, Covid-19, that has infected millions of Americans and killed over 200,000. Infected individuals require various levels of health care, often quite significant, paid at least in part by their health insurance. Many previously infected individuals continue to show signs of longer-lasting, even chronic, conditions that will require future health care and health insurance. A ruling for the plaintiffs could affect these individuals’ health-insurance policies, and their ability to obtain quality and affordable health care for treatment. At the same time, lingering Covid-19-related conditions could drive up insurance rates or even prevent some previously infected individuals from obtaining new health insurance without the community-rating and guaranteed-issue provisions in the ACA.
But that’s only if the Court rules for opponents on each of the three issues in the case. Such a ruling is not at all certain. For starters, the Court could dismiss the case for lack of standing, vacate the lower courts’ rulings, and leave the ACA in place, exactly as it is. Despite the plaintiffs’ and the government’s arguments, and despite the lower courts’ rulings, the plaintiffs’ standing is tenuous. The universal-coverage provision doesn’t require any of the individual or state plaintiffs to do anything, and the states’ theory of standing hinges on other provisions of the ACA. It’s not at all clear that the Court will rule for the plaintiffs on standing. That said, the Court’s rulings on standing often seem to turn on the underlying merits. That may be true here, too: if a majority wishes to address the merits, the Court will likely find standing.
As to the universal-coverage provision, the Court seems primed to rule this unconstitutional. Remember that Chief Justice Roberts wrote for a bare majority in NFIB that the universal-coverage provision fell within congressional authority to tax, because it could raise revenue. But with the provision now zeroed-out, it is not at all clear that Chief Justice Roberts would vote to uphold it. Even if the other current justices who joined this portion of the NFIB ruling (Justices Breyer, Sotomayor, and Kagan) voted to uphold the provision, there may now be a five-justice majority against the provision. Since Justice Ruth Bader Ginsburg’s death, the Court has only eight justices. (More on this below.) A four-four tie would affirm the Fifth Circuit’s ruling striking the universal-coverage provision, but without setting a Supreme Court precedent.
As to severability, we just don’t know. To be sure, there is language in NFIB that suggests that the universal-coverage provision is inextricably linked to other provisions of the Act, particularly the guaranteed-issue and community-rating provisions. But that language does not necessarily foretell the Court’s ruling on severability. (The inextricability of the universal-coverage provision as a matter of policy may be different than the inseverablity of the provision as a matter of constitutional law.) If the Court were to strike the universal-coverage provision, it could (1) rule all of the Act severable (and strike only the universal-coverage provision), (2) rule only the guaranteed-issue and community-rating provisions inseverable (and strike only the three provisions), (3) rule certain other provisions of the ACA also inseverable (and strike only those provisions), or (4) rule the entire ACA inseverable (and strike the whole Act). Because the Fifth Circuit did not rule on the severability of specific ACA provisions—remember that the Fifth Circuit remanded the case for further consideration of severability—the Court may similarly kick the question back to the lower courts. (As described above, in standing, the government urges the Court to rule the entire Act unconstitutional, but to remand the case for a determination of which provisions harm the individual plaintiffs.)
The timing of the case, just a week after the 2020 presidential election, is critical. As this piece goes to print, President Trump has nominated Judge Amy Coney Barrett to replace Justice Ruth Bader Ginsburg on the Court. Justice Ginsburg voted to uphold the universal-coverage provision in NFIB, and has consistently voted against other challenges to the Act. Judge Barrett, in stark contrast, is on the record opposing the Court’s holding in NFIB that Congress validly enacted the universal-coverage provision under its taxing authority. A Justice Barrett would almost certainly tilt the Court—with possibly a six-justice majority—further against the universal-coverage provision. We probably don’t have enough information to predict the way a Justice Barrett might rule on severability.
At publication, the Senate just began confirmation hearings. If the Senate confirms Judge Barrett before November 10, as now seems likely, she will sit for oral arguments and participate in the case. If the Senate does not confirm Judge Barrett before November 10, under ordinary practice, she won’t—unless the Court orders a reargument in order to include her. With the current eight-justice Court, a tie would simply leave the Fifth Circuit ruling in place.
One final point. Even if the Court were to rule for the plaintiffs on all the issues, Congress could probably restore much or all of the ACA, if it had the votes. Remember that the Court in NFIB held that Congress could enact the universal-coverage provision with a tax penalty under its taxing authority. That ruling still stands, for now, at least. Again, a Justice Amy Coney Barrett could move the Court against it.
Wednesday, November 4, 2020
The Supreme Court will hear oral arguments today in Fulton v. City of Philadelphia, the case testing whether the city's enforcement of a clause in its foster-care contracts that prohibits discrimination by sexual orientation violates Catholic Social Service's Free Exercise rights. Here's my preview, from the ABA Preview of United States Supreme Court Cases, with permission:
The City of Philadelphia’s Department of Human Services (DHS) operates the City’s foster-care program. DHS takes legal custody of children whom courts have removed from their homes, and places the children in a foster home or facility that is appropriate to each child’s interests and needs.
In order to help operate the program, DHS contracts with private-sector social-service providers. Some of these providers serve as “Community Umbrella Agencies” (CUAs), which provide social services to foster children. Some operate congregate-care facilities, which provide group housing for children. And some operate as “Foster Family Care Agencies” (FFCAs), which conduct home studies of potential foster parents, issue certifications for families that meet state criteria, and, upon referral from DHS, place children with foster parents that the FFCAs have certified. State law delegates authority to FFCAs, so that FFCAs exercise state power when they evaluate and certify foster parents. Private agencies have no authority to place children with foster parents without an FFCA contract. Still, DHS’s standard contract says that a contracting agency “is an independent contractor,” and not “an employee or agent of the City.”
DHS contracts include a standard nondiscrimination clause. The clause says that FFCAs must comply with the City’s Fair Practices Ordinance, which prohibits discrimination based on any protected characteristic, including sexual orientation. The contracts also say that contractors “shall not discriminate” in any “public accommodations practices” on the basis of sexual orientation.
Catholic Social Services (CSS) is a faith-based social-service organization that has long contracted with DHS to provide services in the City’s foster-care program. On March 13, 2018, the Philadelphia Inquirer ran a piece titled “Two foster agencies in Philly won’t place kids with LGBTQ people.” The story reported that CSS and another social-service organization would not certify same-sex couples for foster-care placements. In the article, the Archdiocese’s spokesperson confirmed CSS’s longstanding religion-based policy against providing foster-care certification for unmarried couples and for same-sex married couples, but emphasized that CSS had received no inquiries from same-sex couples. (CSS maintains that if it received such an inquiry, it would refer the couple to another agency.)
Two days after the story ran, the City Council passed a resolution condemning “discrimination that occurs under the guise of religious freedom.” Around the same time, the Philadelphia Commission on Human Relations (PCHR), at the request of the Mayor, sent a letter to the Auxiliary Bishop who oversees CSS. The letter asked the Bishop to answer questions about CSS’s policies, including whether “you have authority as a local affiliate/branch of a larger organiz[ation] to create or follow your own policies.” (CSS maintains that the Mayor previously said that he “could care less about the people of the Archdiocese,” called the Archbishop’s actions “not Christian,” and called on Pope Francis “to kick some ass here!”)
The Mayor also contacted DHS Commissioner Cynthia Figueroa. Figueroa met with CSS representatives “to find a mutually agreeable solution.” During the meeting, she urged CSS representatives to follow “the teachings of Pope Francis,” and told them that “times have changed,” “attitudes have changed,” and that CSS should change its policy because it was “not 100 years ago.” CSS maintained its position, however, and DHS then halted its referrals to CSS for the rest of its contractual term, through the City’s Fiscal Year 2018.
CSS’s FY 2018 FFCA contract expired on June 30, 2018. DHS repeatedly expressed its “strong desire to keep CSS as a foster care agency,” and offered CSS FFCA contracts on the same terms as other agencies. In FYs 2019 and 2020, DHS offered CSS a choice between the same contract it offered to other FFCA agencies and a “maintenance contract” to provide foster-care services for families that CSS was already supporting. CSS chose the maintenance contract. (Although CSS declined to enter into an FFCA contract, the agency nevertheless continued to contract with DHS to provide CUA and a congregate-care services.)
In May 2018, while its FY 2018 FFCA contract was still in force, CSS sued DHS. CSS argued that DHS’s move to halt referrals violated the Free Exercise Clause, the Establishment Clause, the Free Speech Clause, and the Pennsylvania Religious Freedom Protection Act. The district court denied CSS’s motion for a preliminary injunction, and the Third Circuit and the Supreme Court denied CSS’s motion for an injunction pending appeal. Fulton v. City of Philadelphia, 139 S. Ct. 49 (2018). (Justices Clarence Thomas, Samuel Alito, and Neil Gorsuch noted their dissent.) The Third Circuit affirmed the district court’s ruling. This appeal followed.
The case includes three distinct issues. We’ll review them one by one.
Free Exercise Clause
Under the Free Exercise Clause, a government action that targets religion or a religious practice must be narrowly tailored, or necessary, to meet a compelling government interest. This test, “strict scrutiny,” is the most rigorous test known to constitutional law; under strict scrutiny, the challenged government action almost always fails. Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993).
On the other hand, a government action that is generally applicable and neutral with regard to religion, but that nevertheless has an “incidental” effect on religion, must only be rationally related to a legitimate government interest. This test, “rational basis review,” is one of the more lenient tests known to constitutional law, and the challenged government action almost always passes. Employment Division v. Smith, 494 U.S. 872 (1990).
In this case, CSS argues that DHS’s nondiscrimination policy targets the agency’s religious exercise, that it is not generally applicable, and that it fails strict scrutiny. CSS claims that “[t]he City has repeatedly shifted policies,” developed post hoc rationalizations for its nondiscrimination policy, and “changed the rules in response to CSS”—all proving that the City targeted CSS’s religious exercise. Moreover, CSS contends that the actions and statements of the City Council, the Mayor, the PCHR, and DHS all reflect hostility toward CSS’s religious beliefs. CSS asserts that the City’s nondiscrimination policy is not generally applicable, because it allows for exemptions by a “Waiver/Exemption Committee” for “constitutional issues” and by “the Commissioner or the Commissioner’s designee, in his/her sole discretion.” CSS contends that the City’s exemptions undermine its own interests, and that the City does not even apply nondiscrimination to its own actions.
CSS argues that the City’s nondiscrimination policy cannot satisfy strict scrutiny. CSS says that the City’s “hostility towards CSS’s religious exercise” and the policy’s many exemptions both show that the City’s interest cannot be compelling. And it claims that the City’s categorical freeze on CSS referrals was not narrowly tailored to meet any City interest, because the move meant that CSS could not place children in already-certified homes, and because the City could instead simply require CSS to refer same-sex couples to another FFCA. (CSS maintains that it already has a policy to do this.)
(The government weighs in to support CSS on this point, and this point only. It argues that the City’s policy targets CSS’s exercise of religion and fails strict scrutiny for many of the same reasons. Notably, the government does not argue that the Court should overrule Smith. It also does not argue that the City violated CSS’s free speech.)
The City responds that its nondiscrimination policy is a neutral law of general applicability, and that it easily satisfies Smith’s rational basis review. The City starts by claiming that it has “significantly greater leeway” in directing its own employees and contractors than when it regulates private individuals. It says that this “extra power” applies with full force to this case, and that the Court should “be especially hesitant to infer anti-religious animus from stray remarks of government officials.”
The City argues that its nondiscrimination requirement is generally applicable and neutral with regard to religion. It says that every FFCA contract contains an identical nondiscrimination requirement, and (contrary to CSS’s understanding) that DHS has no authority to make exceptions and, indeed, has never done so. The City contends that the policy contains “no trace of religious hostility,” and that CSS wrongly infers hostility “from the statements of persons who played no role in the decisionmaking process and from events far removed from the relevant decisions.”
Finally, the City argues that its nondiscrimination requirement does not require CSS to do anything contrary to its religious beliefs. In particular, the City says that neither the policy nor state law requires CSS “to endorse a couple’s relationship when certifying them as qualified foster parents.”
CSS argues that the City compels it to support nondiscrimination in violation of its right to free speech. CSS says that the City requires CSS, as a condition of participation in the foster care system, to issue written certifications of potential foster parents that “evaluat[e] and endors[e] same-sex and unmarried cohabitating relationships.” CSS maintains that this is “private speech,” based on Commissioner Figueroa’s testimony that the City has “nothing to do with” home studies, and does not control their content. CSS claims that the City violated its free speech by revoking its contract and attempting to “leverage a program it pays for to compel speech it does not pay for.” CSS claims that the City cannot justify these violations under strict scrutiny, for the same reasons that it cannot justify its violation of the Free Exercise Clause under strict scrutiny, above.
The City counters that its nondiscrimination policy simply does not compel CSS to say anything about the validity of same-sex relationships. Instead, the City claims that the policy simply regulates CSS’s conduct—not to discriminate against foster parents based on their sexual orientation.
CSS argues that the Court should overrule Smith and its rational basis review test. CSS claims that the Court designed the Smith test to apply when “legislatures make general laws and courts apply them.” But it says that government officials “often infringe religious exercise with non-neutral, non-general laws, and courts mistakenly apply Smith anyway.” (CSS contends that this is exactly what the City and the Third Circuit, respectively, did in this case.) CSS claims that the Smith test is therefore not an administrable standard, and that none of its predictions about its administrability came true. Moreover, CSS asserts that the Smith test lacks support in the text, history, and tradition of the Free Exercise Clause. It says that courts have done much better applying a higher level of scrutiny under the Religious Freedom Restoration Act, the Religious Land Use and Institutionalized Persons Act, and similar state laws, and it argues that the Court should replace the Smith test with strict scrutiny, or at least a more rigorous test based on the “purpose and history” of the Free Exercise Clause. CSS maintains that under a proper heightened standard, the City’s move to freeze its contract would fail.
The City counters that the Court should not overrule Smith. The City says that this case is “an extremely poor vehicle to reconsider Smith,” because it involves government contracting (not direct government regulation) and because the City’s nondiscrimination policy satisfies strict scrutiny, anyway. (The City and intervenor Support Center for Child Advocates and Philadelphia Family Pride say that banning discrimination in its FFCA contracts is narrowly tailored to achieve the compelling government interests of eliminating discrimination based on sexual orientation and ensuring that children in foster care have access to all qualified families.) Moreover, it claims that the Smith test “has firm support” in the original meaning of the Constitution, and that it “has served as the predicate for three decades of precedents and legislative enactments.”
This case pits a plaintiff’s right to free exercise of religion against the government’s power to ban discrimination by sexual orientation—a tension that is increasingly familiar in today’s politics and constitutional law. Under existing free-exercise law, in Smith, a plaintiff’s religious rights would almost certainly give way to a government’s categorical ban on discrimination. But if a plaintiff can demonstrate that a government’s ban is not generally applicable or neutral with regard to religion, or that a government official targeted or exhibited hostility toward the plaintiff’s religion, then a plaintiff’s free-exercise claim would almost surely prevail.
The Court last addressed this tension just three Terms ago, in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, 138 S. Ct. 1719 (2018). In that case, a baker claimed that Colorado’s ban on discrimination would require him to bake a wedding cake for a same-sex couple in violation of his right to free exercise. The Court, in a seven-to-two ruling, held that members of the Colorado Civil Rights Commission exhibited hostility toward the baker’s religion in considering his case, and that the Commission therefore violated his free-exercise rights. The Court, however, did not say whether Colorado’s anti-discrimination law would violate the baker’s religious rights without that kind of hostility, under the Smith test. (We expected to see other similar challenges like this, especially in the wake of Obergefell v. Hodges, 135 S. Ct. 2071 (2015), where the Court struck state laws that banned same-sex marriage. But the Court has not (yet) taken these cases. In fact, the Court earlier this month declined to take up the appeal of Kim Davis, the Kentucky clerk who refused to issue marriage licenses to same-sex couples because of her religious beliefs. Justices Clarence Thomas and Samuel Alito issued a strong statement on the Court’s denial of certiorari that took aim at Obergefell and elevated Davis’s religious claim. Davis v. Ermold, 2020 WL 5881537 (Oct. 5, 2020).)
Masterpiece Cakeshop and Fulton well illustrate the increasingly familiar tension between nondiscrimination by sexual orientation and free exercise. Fulton now gives the Court another shot to reckon with it.
The parties in Fulton frame at least some of their free-exercise arguments around Masterpiece Cakeshop. CSS says that the City exhibited exactly the same kind of hostility toward religion that members of the Colorado Civil Rights Commission exhibited against the baker in that case. The City, for its part, contends that its officers did not exhibit this kind of hostility, and that, in any event, those officers weren’t in the decisionmaking loop. The City also says that the Court should grant greater leeway to the City in regulating its contractors than the Court granted the Colorado Civil Rights Commission in regulating a private person (the baker).
If the Court sees Fulton through the lens of Masterpiece Cakeshop, these similarities and differences will matter. A ruling for CSS could continue the Court’s trend toward increasing free-exercise rights, while a ruling for the City could provide an important backstop to Masterpiece Cakeshop. Either way, though, if the Court sees Fulton through the lens of Masterpiece Cakeshop, it could retain the Smith test.
But if the Court also tackles the Smith issue, the case could be even more important. Smith was a hotly controversial ruling from the start, provoking legislative responses from the federal government (in the Religious Freedom Restoration Act and the Religious Land Use and Institutionalized Persons Act) and states (in “mini-RFRAs”). The case remains controversial today. Moreover, the issue comes to the Court as it has moved steadily in recent years to privilege the right to free exercise of religion. For these reasons, the issue seems well teed-up for the Court. If so, Fulton could accelerate the Court’s trend toward greater and greater religious rights, and even provide a capstone to the Court’s cases in this area by overruling Smith. At the same time, Fulton could restrict, at least to some degree, governments at all levels from enacting and enforcing generally applicable laws, like the nondiscrimination policy at issue in this case. But on the other hand, as the City points out, this may not be the right case for the Court to take such a significant step.
As to CSS’s free speech claim: don’t look for the Court to hang its hat here. The claim itself is weak; it’s overshadowed by the free-exercise issues; and the parties did not heavily brief it. Free speech may have been an obligatory adjunct to CSS’s claims (as it was in the baker’s case in Masterpiece Cakeshop), but this case is much more likely to be significant for what it’ll say about free exercise.