Supreme Court Considers Overruling Free Exercise Precedent in Fulton v. Philadelphia
Legal Sidebari
Supreme Court Considers Overruling Free
Exercise Precedent in Fulton v. Philadelphia
November 9, 2020
On November 4, 2020, the Supreme Court heard oral argument in Fulton v. City of Philadelphia, an
appeal asking the Court to revisit foundational precedent interpreting the First Amendment’s Free
Exercise Clause. The November session of oral arguments was the first for newly confirmed Justice Amy
Coney Barrett, who could play a key role in resolving this appeal. In Fulton, a Catholic foster-care agency
raised religious objections to complying with Philadelphia’s policies prohibiting contractors from
discriminating on the basis of sexual orientation. The City had stopped referring foster children to the
agency after discovering it would not work with same-sex couples as foster parents. The lower courts
rejected the agency’s constitutional claims, citing Employment Division v. Smith, a 1990 case in which the
Supreme Court held that the Free Exercise Clause general y wil not “excuse” individuals from complying
with valid, neutral, and general y applicable laws. The Court agreed to consider whether to revisit Smith
when it granted the petition for certiorari in Fulton. If the Court overrules Smith, it would likely make it
easier for religious entities to seek religious exemptions from general y applicable laws. The case could
have significant implications not only for other foster care and adoption agencies seeking to avoid
complying with local nondiscrimination policies, but also for other businesses with religious objections to
serving certain customers or events.
This Legal Sidebar provides an overview of the constitutional jurisprudence at issue in this case, as wel
as a discussion of the specific facts and arguments raised in Fulton, including the Justices’ questioning at
oral argument. It concludes by discussing the potential implications of the case for Congress.
Legal Background
The First Amendment’s Free Exercise Clause provides that the government “shal make no law . . .
prohibiting the free exercise” of religion. The Supreme Court has said the government general y may not
“target[] religious beliefs as such.” If a law restricts religious “practices because of their religious
motivation” or discriminates based on religious status, it wil be subject to strict scrutiny, meaning the law
is invalid unless the government can show it “is justified by a compel ing interest and is narrowly tailored
to advance that interest.” In 2018, for example, the Supreme Court held in Masterpiece Cakeshop, Ltd. v.
Colorado Civil Rights Commission that a state violated the Free Exercise Clause when it applied its
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nondiscrimination laws to compel a baker to make a cake for a same-sex wedding because the state’s
administrative proceedings demonstrated hostility towards the baker’s religious beliefs.
Under Employment Division v. Smith, however, a law does not violate the First Amendment if the burden
on religious exercise is “merely the incidental effect of a general y applicable and otherwise valid
provision.” In Smith, the Supreme Court rejected a free-exercise claim brought by two members of a
Native American church. They chal enged a state’s decision to deny them unemployment benefits after
they were fired for using peyote in violation of state criminal drug laws. The church members argued that
this denial of benefits impermissibly burdened their religious practice, given that the peyote was used for
sacramental purposes. The Supreme Court rejected this claim, stating that “the right of free exercise does
not relieve an individual of the obligation to comply with a ‘valid and neutral law of general applicability
on the ground that the law proscribes (or prescribes) conduct that his religion prescribes (or proscribes).’”
Justice Antonin Scalia, writing for the five-Justice majority in Smith, acknowledged that some prior
Supreme Court decisions had applied a heightened standard to analyze free-exercise claims, but said those
rulings requiring the government to demonstrate a compel ing interest had “nothing to do with an across-
the-board criminal prohibition on a particular form of conduct.” The Smith Court concluded that these
earlier cases concerned laws that were not truly “general y applicable.” Instead, those cases involved
systems like unemployment-benefit programs in which the government decided case by case whether to
apply laws through “individualized . . . assessment[s].” Because these cases entailed a greater risk of
religious discrimination in individual exemption decisions, they required a heightened standard of review.
By contrast, the criminal laws in Smith general y prohibited the use of certain drugs and were “not
specifical y directed at [the church members’] religious practice.”
The Court’s ruling in Smith proved “controversial” in both its immediate aftermath and in the years that
followed. Concurring in the judgment in that case, Justice Sandra Day O’Connor claimed that the Court’s
opinion “dramatical y depart[ed] from wel -settled First Amendment jurisprudence” and argued that the
majority should have applied “the compel ing interest test.” Congress expressed its disagreement with the
Smith decision by passing the Religious Freedom Restoration Act (RFRA), which presently imposes a
heightened standard of scrutiny for federal government actions that “substantial y burden a person’s
exercise of religion even if the burden results from a rule of general applicability.” (RFRA does not apply
to state government actions, although many states, including Pennsylvania, have adopted similar statutes
limiting state actions.) Regardless, after Smith, the critical question for evaluating a constitutional free-
exercise claim is often whether the law is neutral or general y applicable, or if instead the government has
impermissibly discriminated against religion, as was the case in Masterpiece Cakeshop.
Fulton v. City of Philadelphia: Procedural History and Arguments
In Fulton, Catholic Social Services (CSS) sued the City of Philadelphia after the City stopped referring
foster children to the agency. The City had discovered that CSS would not comply with local policies
prohibiting sexual orientation discrimination. The specific issue on appeal is whether the City may insist
on including a nondiscrimination provision in its contract with CSS to provide foster-care services.
Before the Third Circuit, CSS primarily argued that the City violated the Free Exercise Clause by
applying its nondiscrimination policy in a way that “was neither neutral nor general y applicable” but
instead targeted CSS’s religious exercise. The Third Circuit, however, rejected CSS’s evidence that
purportedly showed the City “acted out of religious hostility,” concluding that CSS had not been “treated
differently because of its religious beliefs.” Accordingly, the Third Circuit ruled that the case was
governed by Smith, and CSS’s “religiously motivated conduct enjoy[ed] no special protections or
exemption from [the] general, neutral y applied legal requirements” contained in the nondiscrimination
policy. (CSS also unsuccessfully raised constitutional free speech claims before the Third Circuit, and has
revived those claims in its briefing before the Supreme Court. Oral arguments, however, focused on the
free-exercise claims, and so this Legal Sidebar does, as wel —notwithstanding the fact that a different
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federal appeals court ruled in July that a New York adoption agency raising similar constitutional claims
had stated plausible free speech claims.)
Before the Supreme Court, CSS continues to argue that Smith does not apply because the City “imposed
special disabilities on CSS because of its religious beliefs,” demonstrating impermissible “hostility
toward CSS’s religious beliefs” and triggering heightened scrutiny. The United States filed an amicus
brief in support of CSS that agrees with these claims. CSS also suggests, however, that while the Court
could rule for the agency by holding that Smith does not govern, “the more straightforward way to clarify
the law” in this case would be “to replace Smith with” a new standard for evaluating free-exercise claims.
CSS argues that Smith’s rule al owing more lenient review in the context of general y applicable laws is
inconsistent with “the text, history, and tradition” of the Free Exercise Clause. CSS contends that the
Court should instead adopt a strict-scrutiny standard for al laws that infringe religious exercise, al owing
religious protection to be limited only in the case of “particularly important government interests.” And
the City fails to meet that burden, says CSS, because a “broad nondiscrimination interest” is insufficient
to justify infringing the agency’s “religious exercises concerning marriage.”
During oral argument, some of the Justices explored how the strict-scrutiny standard advanced by CSS
might play out in future cases. Justices Stephen Breyer, Sonia Sotomayor, and Amy Coney Barrett asked
how courts should evaluate claims by entities with religious objections to interracial marriage. If the
Court were to hold that the Free Exercise Clause prevents governments from applying nondiscrimination
laws to those who object to same-sex marriage, these Justices questioned whether governments would
have to extend the same treatment to those raising religious objections to interracial marriage. In
response, the attorney arguing on behalf of the United States suggested courts would not have to al ow
racial discrimination, pointing to Supreme Court precedent that, in his view, established that eradicating
racial discrimination “presents a particularly unique and compel ing interest.” Justice Samuel Alito
followed up this answer by asserting that Obergefell v. Hodges, the 2015 case that struck down state laws
discriminating against same-sex marriage, supported the idea that racial discrimination would present a
different case. Justice Alito and the attorney for the United States both noted that Justice Anthony
Kennedy’s opinions in Obergefell and Masterpiece Cakeshop contained language recognizing religious
beliefs opposing same-sex marriage as worthy of respect and suggesting that the government should
accommodate those beliefs.
Justice Elena Kagan later pressed the attorney for the United States to answer whether the United States
believed that governments have a compel ing interest in preventing discrimination on the basis of sexual
orientation, and the attorney conceded that “in the abstract,” the interest might “perhaps” be compel ing.
In response to later questioning by Justice Brett Kavanaugh, though, the attorney for the United States
argued that Philadelphia’s potential interest in enforcing its nondiscrimination policy against CSS,
specifical y, was undermined by the fact that other foster agencies were wil ing to work with gay couples .
He suggested that consequently, the government’s interest in ensuring gay couples have the opportunity to
serve as foster parents was served even if CSS would not work with them. Counsel for intervening civil
rights groups later contended, however, that if the City was “required to grant exemptions,” other
agencies might also seek to turn away couples based on their sexual orientation or other characteristics.
The City’s arguments emphasize that this case involves the terms of a government contract, saying that
“[w]hatever CSS’s rights when regulated by the government, it is not entitled to perform services for the
government however it sees fit.” Drawing from precedent establishing that the government has more
leeway to regulate public employment and its own internal affairs than private entities, the City argues
that ordinary constitutional principles do not apply to this dispute involving a government contractor.
Instead, the City contends that a more deferential approach is appropriate, suggesting that contracting
rules should receive more forgiving review than Smith’s neutral-and-general y-applicable standard. But
even if normal standards apply, the City says its nondiscrimination requirement, which is included in
every contract and applies to “secular and religious agencies alike,” satisfies Smith’s neutral-and-
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general y applicable standard. In response to CSS’s claims that the City targeted CSS because of its
religious beliefs and did not act neutral y, the City maintains that the extrinsic statements of government
officials highlighted by CSS are insufficient to demonstrate religious hostility.
The first question during oral argument, from Chief Justice John Roberts, asked CSS’s attorney to
respond to the City’s argument that the government should have more leeway under the Free Exercise
Clause to set conditions for contractors in a public program, as opposed to when it is issuing regulations
that apply “across the board.” Most of the other Justices also seemed interested in this issue. For example,
Justice Sotomayor asked why CSS’s situation is different from other cases where courts have al owed the
government to “set the criteria it wants” for its contractors. In one exchange, Justice Kagan asked what
the outcome would be if a prison contractor objected to a contractual provision prohibiting employees
from using drugs by seeking a religious exemption for peyote use. CSS’s attorney said the government’s
interests would “be a lot stronger” in that hypothetical situation. In contrast, Justice Neil Gorsuch later
asked whether it mattered that this contract provision was based on a city ordinanc e. CSS’s attorney
asserted that this separate, legal y binding ordinance took the city “out of the contracting context” and
into “the general regulating context.”
Final y, the City argues this case “is an exceptional y poor vehicle to consider the validity of Smith,” both
because the case arises in the context of a contractor dispute and because the City says it can satisfy strict
scrutiny. The City claims its nondiscrimination requirement serves “state interests of the highest order,”
including ensuring equal treatment for prospective foster parents and maximizing the number of available
foster parents, and is “narrowly tailored to serve those interests.” The City also contends the Court should
adhere to stare decisis principles and not overrule Smith because Justice Scalia’s opinion remains a
reasonable interpretation of the text and historical understanding of the First Amendment.
Implications for Congress
The Supreme Court’s ruling in Fulton could have significant implications for free-exercise claims,
particularly if the Court overturns Smith, which effectively renders many free-exercise chal enges to
neutral and general y applicable laws unsuccessful. In some sense, if the Court overturned Smith and
instituted a strict-scrutiny standard as advocated by CSS, the practical implications of such a ruling might
be limited by RFRA, which already requires applying a strict-scrutiny analysis if the federal government
substantial y burdens a person’s free exercise of religion. But while Congress retains the power to amend
RFRA, the legislature cannot change judicial interpretations of the First Amendment, as Justice Breyer
pointed out at oral argument. Thus, a Supreme Court decision instituting a strict-scrutiny standard under
the Free Exercise Clause would mean that such heightened review of government action would continue
even if Congress repealed RFRA or legislated that RFRA does not apply to certain government actions.
Alternatively, the Supreme Court could decide Fulton without reconsidering Smith. For example, the
Court could agree with the City that, regardless of what standard governs free-exercise chal enges to
ordinary regulations, courts should apply a more deferential standard in the contracting context. Such a
decision would likely give federal and state governments more leeway to impose conditions on
contractors, even those with religious objections. Conversely, the Court could rule for CSS on narrower
grounds, similar to its 2018 Masterpiece Cakeshop decision in which the Court focused on whether the
state proceedings at issue demonstrated hostility towards a baker’s religious beliefs. Justice Barrett raised
this possibility at oral argument, asking why the Court should “even entertain the question whether to
overrule Smith” if the Court could instead rule for CSS by holding that Smith does not apply. Along these
lines, others, including Justices Alito and Kagan, asked whether the City’s nondiscrimination policy was
non-neutral under Smith because it seemed to contemplate the possibility of granting exemptions al owing
noncompliance. A ruling that leaves Smith in place could stil have important consequences by clarifying
Supreme Court precedent on when a specific law is not neutral y applied or general y applicable within
the meaning of Smith.
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Regardless of how the Supreme Court resolves Fulton, further litigation is likely. At least two other
petitions currently pending before the Court ask the Court to overrule Smith, potential y presenting the
Justices with another opportunity to revisit Smith if they decide not to reach the issue in this case. Apart
from Masterpiece Cakeshop, the Court has been presented with a number of other appeals from religious
businesses that have sought to decline service to same-sex weddings without being punished for violating
nondiscrimination laws. But religious entities may seek religious exemptions from general y applicable
laws in a variety of contexts, as demonstrated by the facts of Smith itself. For example, one of the other
pending petitions that asks the Court to revisit Smith involves a would-be government contractor who
raises religious objections to providing the government with his Social Security number.
On the other hand, overruling Smith to institute a heightened standard of review for al Free Exercise
Clause chal enges could prompt more adoption or foster-care agencies—and many other entities—to seek
religious exemptions from general y applicable federal and state policies, including provisions prohibiting
discrimination on the basis of sexual orientation. As suggested during oral argument, one open question
that could arise in these chal enges is whether governments can satisfy strict scrutiny to justify applying
such nondiscrimination laws to religious agencies. In Bob Jones University v. United States, the Supreme
Court concluded that the IRS could deny tax-exempt status to private schools that discriminated on the
basis of race, even though the schools claimed that the racial discrimination was required by their
religious beliefs and protected by the Free Exercise Clause. The Court said that “certain governmental
interests” are “so compel ing” that they wil “al ow even regulations prohibiting religiously based
conduct.” In particular, the Court held that the government’s interest “in eradicating racial discrimination
in education” was so compel ing that it outweighed any burden imposed on the schools’ religious exercise
by the denial of the tax benefit, and further held that application of the nondiscrimination policy was the
least restrictive means to achieve this interest. The Supreme Court has not considered whether
governments’ interests in general y eradicating discrimination on the basis of non-racial classifications
could satisfy strict scrutiny, but may be faced with this question in the near future.
Author Information
Valerie C. Brannon
Acting Section Research Manager
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