United States: U.S. Supreme Court: Excluding Religious Schools From A Scholarship Program Is Unconstitutional

Highlights

• In Espinoza v. Montana Department of Revenue, the U.S. Supreme Court has ruled that Montana could not exclude religious schools from a tax credit scholarship program on the grounds that the state "no aid" or Blaine amendment required it.
• The decision reiterates that disqualifying otherwise eligible recipients from a public benefit solely because of their religious character imposes a penalty on the free exercise of religion that requires the most exacting scrutiny.
• The U.S. Supreme Court determined that Montana's constitutional interest in separating church and state more strictly than the Establishment Clause was not a compelling interest that could satisfy strict scrutiny in opposition to the Free Exercise Clause.

In Espinoza v. Montana Department of Revenue, No. 18-1195, 2020 WL 3518364 (June 30, 2020), the U.S. Supreme Court ruled that Montana could not exclude religious schools from a tax credit scholarship program on the grounds that the state "no aid" or Blaine amendment, Mont. Const. Art. X, § 6(1), required it. The court determined that the state's constitutional interest in separating church and state more strictly than the Establishment Clause was not a compelling interest that could satisfy strict scrutiny in opposition to the Free Exercise Clause.

Background

Like other tax credit scholarship programs, Montana's grants a tax credit to any taxpayer who donates to a participating student scholarship organization. The organization then uses the donations to award scholarships to children for tuition at an eligible private school. In Montana, the scholarship organization provides scholarships to families who face financial hardship or have children with disabilities. Shortly after the scholarship program was created, the Montana Department of Revenue prohibited families by rule from using scholarships at religious schools. Three mothers whose children attend a private Christian school sued.

The trial court ruled for the plaintiffs and enjoined the rule, but the Montana Supreme Court reversed and invalidated the entire scholarship program, finding that the Montana Department of Revenue was without authority to save it by excluding religious schools.

Supreme Court Decision

The U.S. Supreme Court reversed the Montana Supreme Court, reiterating that disqualifying otherwise eligible recipients from a public benefit solely because of their religious character imposes a penalty on the free exercise of religion that requires the most exacting scrutiny. Montana argued that this rule was inapplicable because the Blaine amendment applied not because of the religious character of the recipients but how the funds would be used; i.e., for religious education.

A plurality in prior case law declined to address discrimination with respect to "religious uses of funding or other forms of discrimination." In Espinoza, the U.S. Supreme Court decided it did not need to decide this issue either because the Montana Supreme Court applied the Blaine amendment solely by reference to religious status as evidenced by its repeated explanation that the Blaine amendment bars aid to schools controlled by churches, sectarian schools and religiously affiliated schools. Concurring, Justice Neil Gorsuch was not convinced that Montana's discrimination was solely status-related or that it matters at all to free exercise protection. Justices Stephen Breyer and Elena Kagan were not convinced either that Montana's discrimination was solely status-related, but this was a key reason that they dissented to avoid funding the inculcation of religion. According to the majority, status-based discrimination remains status-based even if one of its goals or effects is preventing religious organizations from putting aid to religious uses. The court hastened to add that by avoiding the status-use dichotomy, it did not mean to imply that some lesser degree of scrutiny applies to discrimination against religious uses of government aid, only that the issue did not need to be examined in Espinoza.

Montana argued that a prior decision of the court holding that the state of Washington could deny a scholarship to a student pursuing a devotional theology degree at a Christian school vindicated its exclusion. The U.S. Supreme Court rejected this argument, noting that Washington had merely chosen not to fund the training of a minister and otherwise awarded scholarships to students attending "pervasively religious schools." The court observed that there is a historic and substantial state interest in not funding the training of clergy but no comparable one against state funding of education in religious schools. The court noted that, until the second half of the 19th century, this type of funding was common until anti-Catholic Blaine amendments, "born of bigotry" and the Know Nothing movement, were enacted in several states. Although several states later readopted them allegedly for reasons unrelated to bigotry, many of them also allowed religious schools to participate in state scholarship programs, making for a "complex" historical record. Concurring, Justice Samuel Alito observed that over his dissent the court in a different case considered material the original racially bigoted rationale for laws in Louisiana and Oregon allowing non-unanimous jury verdicts in criminal trials, although these laws were later readopted. If the original motivation for the laws mattered there, he wrote, it certainly matters here.

Montana also argued that its Blaine Amendment and prohibition on religious schools receiving aid was essential to safeguard public schools against diversion of public support, but the U.S. Supreme Court determined that Montana's interest in public education cannot justify a constitutional provision that requires only religious private schools to bear its weight. Montana's final argument was that because the Montana Supreme Court struck the entirety of the tax credit program in light of the participation of religious schools, the plaintiffs could no longer complain that they were excluded from a generally available benefit. The program no longer existed. Justices Ruth Bader Ginsburg, Kagan and Sonia Sotomayor agreed in dissent, arguing that the Montana Supreme Court never made religious schools ineligible for an otherwise available benefit and never decided that the Free Exercise Clause would allow that outcome. In their view, there was no differential treatment nor coercion. They further contended that there was no facial challenge to the Montana Blaine amendment under the Free Exercise Clause. However, the majority ruled that because the elimination of the program flowed directly from the Montana Supreme Court's failure to follow the dictates of federal law, it could not be defended as a neutral policy decision or as resting on adequate and independent state law grounds. The court concluded that the "supreme law of the land" condemns discrimination against religious schools and the families whose children attend them.

Originally published by Holland & Knight, July 2020

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