SCOTUS Rules Federal Constitution Trumps State Constitution in Religious School Aid Case

In Espinoza v. Montana Department of Revenue, the Supreme Court held 5-4 that the U.S. Constitution’s Free Exercise Clause allows families to receive tax-credit funded scholarships to attend religious schools regardless of the Montana Constitution’s no-aid to sectarian schools provision.

The Montana legislature established a program offering tax credits for donations to “student scholarship organization,” which give children scholarships to attend private schools, including religious schools. The Montana Department of Revenue adopted a rule disallowing the use of scholarships at religious schools based on the Montana Constitution which prohibits disallows state aid to sectarian schools. The Montana Supreme Court struck down the entire scholarship program holding that it violated the Montana constitution.

The U.S. Supreme Court, in an opinion written by Chief Justice Roberts, assumed that the Montana constitution bars religious schools from participating in the scholarship program. The Court held that the U.S. Constitution’s Free Exercise Clause allows religious schools to participate in the program; per the U.S. Constitution’s Supremacy Clause the Free Exercise Clause trumps the Montana Constitution. 

In Trinity Lutheran Church of Columbia v. Comer (2017), the Court stated 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 triggers the most exacting scrutiny.” In that case Missouri offered playground resurfacing grants to nonprofits but disallowed religious organizations from applying. The Supreme Court concluded Missouri’s policy failed strict scrutiny because it discriminated against the church “simply because of what it is—a church.”

Applying the reasoning of Trinity Lutheran to this case, the Court opined: “Here too Montana’s no-aid provision bars religious schools from public benefits solely because of the religious character of the schools. The provision also bars parents who wish to send their children to a religious school from those same benefits, again solely because of the religious character of the school.”

Interestingly, the Court didn’t distinguish this case from Trinity Lutheran regardless of funds in this case being used for religious education. According to the Court, “[t]his case also turns expressly on religious status and not religious use. The Montana Supreme Court applied the no-aid provision solely by reference to religious status.” The Chief Justice noted that some Justices have questioned “whether there is a meaningful distinction between discrimination based on use or conduct and that based on status,” but this case didn’t require resolving that question.

The Court distinguished this case from Locke v. Davey (2004), where the Supreme Court upheld a Washington State scholarship program that wouldn’t fund the study of devotional theology. First, the Court noted that the student in Locke “was denied a scholarship because of what he proposed to do—use the funds to prepare for the ministry.” Second, states have historically not funded training of the clergy, while they have funded religious schools.

Applying strict scrutiny to Montana’s no-aid provision, the Court rejected the Montana Supreme Court’s argument that the state’s interest in separating church and state “more fiercely” than the federal Constitution is a compelling. The Court also rejected the Montana Department of Revenue’s arguments that the no-aid provision passes strict scrutiny because it promotes religious freedom and “advances Montana’s interests in public education.”

Finally, the Court rejected the argument there is no free exercise violation here because the Montana Supreme Court eliminated the scholarship program. According to the Court, eliminating the entire program was an error that “flowed directly from the Montana Supreme Court’s failure to follow the dictates of federal law.”

Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented.