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Supreme Court of the United States • 2021

Fulton v. Philadelphia

593 U.S. 522

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Takeaway

In short, Fulton held that Philadelphia violated the Free Exercise Clause because its foster-care contract allowed discretionary exemptions from its nondiscrimination rule yet denied CSS a religious exception without a compelling justification; the Court left Smith formally intact.

Background

Philadelphia administered foster care through annual contracts with private agencies. Catholic Social Services (CSS), a Catholic foster-care agency that had worked with the City for more than 50 years, certified prospective foster families under Pennsylvania standards and supported families after children were placed. CSS believed that marriage is a sacred union of one man and one woman. Because it regarded certifying a family as endorsing that family relationship, CSS would not certify unmarried couples or same-sex married couples, though it would certify gay and lesbian individuals. No same-sex couple had sought certification from CSS, and more than 20 other Philadelphia agencies would certify same-sex couples.

After a 2018 newspaper report described CSS's policy, City officials investigated. The City stopped referring children to CSS and said it would not renew CSS's full foster-care contract unless CSS agreed to certify same-sex couples. Philadelphia maintained that CSS's policy violated both the contract's nondiscrimination provisions and the City's Fair Practices Ordinance.

CSS and affiliated foster parents sought preliminary injunctive relief, alleging violations of the Free Exercise and Free Speech Clauses. The District Court denied relief, holding that the relevant contractual requirement and Fair Practices Ordinance were neutral and generally applicable under Employment Division v. Smith. The Third Circuit affirmed, focusing on whether Philadelphia could condition contract renewal on an express prohibition of sexual-orientation discrimination. The Supreme Court reversed and remanded.

Issues

Issue #1

Whether the Court needed to overrule Employment Division v. Smith to resolve CSS's Free Exercise claim.

Holding

No. The Court did not reconsider Smith because Philadelphia's policy was not generally applicable and therefore failed Smith's threshold rule.

Reasoning

Smith ordinarily permits neutral and generally applicable laws that incidentally burden religion. But a policy outside those conditions remains subject to strict scrutiny. CSS's religious practice was plainly burdened because the City forced it to choose between continuing its foster-care ministry and certifying relationships that it believed its faith prohibited.

The Court did not decide whether Philadelphia had acted with religious hostility or lacked neutrality, although CSS had offered evidence on that point. It instead resolved the case on general applicability, which Smith and Church of Lukumi Babalu Aye treat as an independent requirement for avoiding heightened scrutiny.

Issue #2

Whether the foster-care contract's nondiscrimination provisions were generally applicable under Smith.

Holding

No. The contract created a system of individualized exemptions, so Philadelphia could not deny CSS a religious accommodation without satisfying strict scrutiny.

Reasoning

Section 3.21 required providers not to reject prospective foster parents for services based on sexual orientation, but it allowed an exception at the Commissioner's "sole discretion." Like the individualized "good cause" exemption system in Sherbert v. Verner, this provision invited the government to decide which reasons for noncompliance warranted accommodation. That feature alone made the rule not generally applicable, even if the Commissioner had never granted an exception.

The City argued that Section 3.21 concerned only referrals of children to already-certified foster parents rather than the certification process. The Court rejected that narrow reading. The provision's text covered prospective foster parents and services generally, certification was among the services agencies performed, and the City had adopted the language after saying it would make CSS's certification obligation explicit in future contracts.

A separate provision, Section 15.1, prohibited discrimination based on sexual orientation without expressly mentioning exceptions. But Pennsylvania contract law required provisions to be read together rather than in a way that nullified another provision. Thus, an exception available under Section 3.21 also had to govern Section 15.1; otherwise the Commissioner's reserved authority to grant an exception would have no effect. The contract as a whole therefore lacked a generally applicable nondiscrimination rule.

Philadelphia's position as a manager of a government foster-care program did not alter the result. The Court left open whether contractual rules may receive some additional deference in determining neutrality and general applicability, but held that no degree of deference could overcome a formal system of entirely discretionary exemptions.

Issue #3

Whether Philadelphia's Fair Practices Ordinance independently prohibited CSS from declining to certify same-sex couples.

Holding

No. CSS was not a public accommodation when it performed foster-parent certifications, so the Ordinance did not apply.

Reasoning

The Ordinance covered providers whose goods or services are offered or made available to the public. The Court read that language in its ordinary sense: a public accommodation makes a benefit broadly accessible to members of the general public who wish to use it.

Foster-parent certification was not comparable to ordinary public accommodations such as hotels, restaurants, or public transportation. It required a highly selective, individualized process lasting months, including background checks, medical examinations, and a home study assessing applicants' relationships, emotional adjustment, and community ties. Because certification was not readily available to the public, the Court held that the Ordinance did not govern CSS's certification decisions.

Having concluded that the Ordinance did not apply, the Court did not decide whether the Ordinance itself was generally applicable under Smith.

Issue #4

Whether Philadelphia could satisfy strict scrutiny by refusing to contract with CSS unless it certified same-sex couples.

Holding

No. Philadelphia did not show a compelling interest in denying CSS a specific religious exception, and its policy therefore violated the Free Exercise Clause.

Reasoning

Once strict scrutiny applied, Philadelphia had to show that denying an exception to CSS—not merely enforcing nondiscrimination policies in the abstract—served interests of the highest order and was narrowly tailored. The City invoked interests in increasing the number of foster families, avoiding liability, and ensuring equal treatment of prospective foster parents and children.

Allowing CSS to continue participating would not undermine the goal of increasing foster homes; excluding CSS was more likely to reduce the available pool of foster families. The City's asserted risk of liability was speculative, particularly because Pennsylvania delegated foster-family certification authority to state-licensed agencies rather than to the City.

Equal treatment of gay and lesbian people is a weighty governmental interest, and the Court reaffirmed that gay persons and couples cannot be treated as social outcasts or as inferior in dignity and worth. But on this record, Philadelphia could not establish a compelling reason to deny CSS an exception while retaining a discretionary exemption system for others. CSS sought only to continue its services consistently with its faith; it did not seek to prevent same-sex couples from obtaining certification through the many other agencies that served them.

Because the Free Exercise Clause resolved the case, the Court did not reach CSS's separate Free Speech claim.

Concurrences

Justice Barrett

Reasoning

Justice Barrett agreed that strict scrutiny applied and that Philadelphia could not satisfy it. She joined the Court's opinion because the contract's individualized-exemption mechanism was sufficient to decide the case under a rule that both predated and survived Smith.

She nevertheless expressed serious doubts about Smith. In her view, the Free Exercise Clause is difficult to read as providing only protection against religious discrimination while leaving generally applicable laws free to impose even severe burdens on religious exercise. She regarded the textual and structural objections to Smith as substantial, although she found the historical record less conclusive.

Justice Barrett did not endorse an automatic rule of strict scrutiny for every neutral and generally applicable law that burdens religion. Replacing Smith with an equally categorical strict-scrutiny rule would raise difficult questions about religious entities and individuals, direct and indirect burdens, and the degree of scrutiny appropriate in different contexts. Since all nine Justices agreed that strict scrutiny governed this case and Philadelphia lost under that test, she saw no reason to resolve those broader questions here.

Justice Alito

Reasoning

Justice Alito agreed with the judgment but would have overruled Smith. He argued that Smith wrongly discarded nearly four decades of precedent applying heightened scrutiny to substantial burdens on religious exercise, and that it leaves religious minorities vulnerable whenever the government adopts a formally neutral, categorical prohibition.

He maintained that the Free Exercise Clause's ordinary meaning protects against government action that forbids or hinders religious practice, not merely against formally unequal treatment. In his historical account, founding-era guarantees of religious liberty broadly protected religious exercise, often subject to exceptions for threats to public peace or safety; those limits, he argued, presupposed that at least some exemptions from otherwise general laws were constitutionally required.

Justice Alito also argued that Smith was poorly reasoned, inconsistent with both earlier and later precedent, and unworkable. Its exceptions for individualized exemptions and so-called hybrid rights have generated doctrinal confusion, while courts have struggled to identify religious targeting, proper secular comparators, and the scope of permitted exceptions. Federal statutes such as RFRA and RLUIPA, he noted, have also shown that courts can apply compelling-interest review without the "anarchy" Smith feared.

The majority's contract-based ruling, in his view, was precarious because Philadelphia could eliminate its unused discretionary-exemption provision and renew its exclusion of CSS. He would instead hold that Philadelphia's action failed strict scrutiny even if its policy were neutral and generally applicable. CSS had never prevented a same-sex couple from becoming a foster parent, other agencies were available to certify such couples, and the City could not suppress CSS's religious practice merely because its traditional view of marriage was considered offensive.

Justice Gorsuch

Reasoning

Justice Gorsuch agreed with the judgment and joined Justice Alito's call to overrule Smith. He argued that Smith was contrary to constitutional text, historical understanding, and precedent, and that the Court should have resolved the question it granted review to decide rather than avoid it through narrow interpretations of local law and contract provisions.

He criticized the majority's conclusion that the Fair Practices Ordinance did not apply. In his view, the Court independently decided a municipal-law question that the Third Circuit had not addressed and that no party had meaningfully contested before the Supreme Court. He also questioned the majority's reliance on a separate Pennsylvania public-accommodations statute and its newly announced distinction between customized, selective foster-care certification and public accommodations.

Justice Gorsuch likewise disputed the Court's reading of the contract. He understood Section 3.21, titled "Rejection of Referral," to concern the later referral or placement stage of foster care, not the earlier recruitment and certification stages at issue. Section 15.1, by contrast, independently barred discrimination in the certification process without an express exception. He regarded the majority as creating a conflict between the provisions and then rewriting Section 15.1 to resolve it.

The narrow ruling, Justice Gorsuch warned, would invite further litigation. Pennsylvania courts could reject the Court's reading of state law, Philadelphia could revise its ordinance, or the City could remove the contractual exception provision. CSS would then face the same ultimatum, while lower courts and religious claimants would remain burdened by Smith's uncertain framework. He would correct Smith now and address later Free Exercise questions case by case.