Espinoza v. Montana Dept. of Revenue
140 S. Ct. 2246
| SCOTUS | 2020Background
- Montana enacted a tax-credit scholarship program (up to $150 tax credit for donations to scholarship organizations) allowing recipients to use awards at any "qualified education provider," which included virtually all private schools.
- The Montana Department of Revenue issued an administrative rule (Rule 1) excluding schools "owned or controlled" by churches from qualifying; the rule was challenged and enjoined in state trial court.
- The Montana Supreme Court held the statutory program, as written, violated Montana Constitution Art. X §6 (a "no-aid"/"sectarian" provision) because it permitted aid to schools "controlled in whole or in part by" churches, and it invalidated the entire tax-credit program.
- Petitioning parents (whose children attend a religious private school) sued, arguing that applying the state no-aid provision to exclude religious schools from the program violated the Federal Free Exercise Clause.
- The U.S. Supreme Court accepted the Montana Supreme Court’s state-law characterization for purposes of review but held that applying Montana’s no-aid rule to bar religious schools from a generally available public benefit discriminated on the basis of religious status and therefore violated the Free Exercise Clause; the Court reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether applying Montana's no-aid provision to exclude religious schools from the scholarship program violated the Free Exercise Clause | Exclusion penalizes religious exercise by denying otherwise available public benefits solely because a school is religious or religiously controlled | The no-aid provision targets religious use (sectarian education) not status; Montana may refuse to fund religious education to preserve separation of church & state | Held for plaintiffs: Montana's application discriminated based on religious status and triggered strict scrutiny, which Montana could not satisfy here |
| Whether Trinity Lutheran or Locke governs the Free Exercise analysis | Trinity Lutheran controls because the exclusion is status-based discrimination against religious institutions | Locke governs because the State can refuse to fund expressly religious uses or "essentially religious" instruction | Held: Trinity Lutheran governs; this is status-based discrimination and strict scrutiny applies; Locke distinguished as involving historic tradition of barring support for clergy/devotional training |
| Whether the Montana Supreme Court's decision to invalidate the entire program cured any Free Exercise injury | Petitioners: invalidation flowed from the discriminatory application, so the injury traces to the state court's discriminatory application and is reviewable | State: because the program was struck down for all schools, there is no unequal treatment and thus no Free Exercise claim | Held: Court rejects this defense — the state-court elimination flowed from an unconstitutional application of state law; that application must yield to the Federal Constitution |
| Whether a historic/"founding-era" tradition supports disallowing aid to religious schools (to justify differential treatment) | Petitioners: no comparable founding-era tradition bars aid to religious schools like the tradition against state-supported clergy | Respondents: many states adopted no-aid (Blaine-type) provisions; historical practice supports the state's position | Held: Court finds the historical record mixed and not comparable to the tradition at issue in Locke (supporting clergy ban), so history does not save the status-based exclusion |
Key Cases Cited
- Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017) (exclusion of religious organizations from public benefits based on religious status triggers strict scrutiny)
- Locke v. Davey, 540 U.S. 712 (2004) (States may refuse to fund devotional-theology degrees; historic interest in avoiding state-supported clergy informed analysis)
- Everson v. Board of Education, 330 U.S. 1 (1947) (First Amendment principles protect religious observers from unequal treatment in public benefits)
- Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993) (laws targeting religious conduct require strict scrutiny)
- Sherbert v. Verner, 374 U.S. 398 (1963) (conditioning benefits on conduct prohibited by religion triggers heightened scrutiny)
- McDaniel v. Paty, 435 U.S. 618 (1978) (discrimination against clergy implicates free exercise and associational protections)