Fulton's Revival of Religious Exemptions

Good news has arrived for religious minorities and friends of religious liberty. Judicially decreed “conduct exemptions” appear to be making a comeback. Since the Supreme Court’s notorious decision in Employment Division v. Smith, it appeared that the Court had permanently gone out of the business of granting these to religious believers in cases in which sincerely-held religious beliefs or practices came into conflict with generally applicable laws. However, the Court’s hot-off-the-press decision in Fulton v. Philadelphia suggests that the Court has found a way of carving out accommodations, while outwardly conforming to Smith.

Prior to the Smith decision in 1990, religious believers might be able to acquire a “conduct exemption” from laws that imposed a substantial burden upon religious practice. A conduct exemption meant that a law applying to everyone else would not apply to certain religious believers because of the hardship imposed upon their religious observance. A substantial burden on religious exercise could exist if a person was required to make a choice between accepting a government benefit (or avoiding a penalty) and acting according to one’s religious commitments. If a substantial burden were created, the onus was on the government to show that it could not make an exception. The government would need to show that its interests are compelling and that no alternative form of regulation could advance this essential end. In the Court’s lingo, it applied the rigorous “strict scrutiny” standard when government infringed upon religious exercise.

Smith claimed to put an end to all this. Justice Scalia, who wrote the majority opinion, believed that the practice of judges granting conduct exemptions from generally applicable laws was a bad idea and a constitutional anomaly. It put judges in the unsavory position of needing to decide the bona fides of religious practices, a job judges are not qualified to do. As Americans become more diverse, and religious beliefs more fractured, the difficulties for judges in identifying real burdens upon religious practices mount. Moreover, Scalia argued that conduct exemptions violate the rule of law by failing to treat all alike. The practice threatened to make individuals, with their particular idiosyncratic beliefs, laws unto themselves. Conduct exemptions could be granted, but it was the job of the legislative branch, not judges, to dole them out.

Furor followed Smith. Congress passed the Religious Freedom Restoration Act (RFRA) in 1993 in an effort to require courts to provide conduct exemptions again, and several states have since passed their own versions covering state law. Still, the free exercise clause had been reduced to offering only anti-discrimination protection. Its scope was limited to cases in which religious practices were being targeted for disfavored treatment. Proving such discrimination is a high hurdle. In free exercise cases, it required showing that a law was not neutral or generally applicable. And so, after Smith, religious observers mostly relied upon legislation like RFRA or its cousin, the Religious Land Use and Institutionalized Persons Act, to get a conduct exemption. If these didn’t apply, they would have to prove discrimination.

But now, there is Fulton.

Fulton arose because the city of Philadelphia refused to continue working with Catholic Social Services (CSS) unless CSS would certify the eligibility of same-sex couples, who otherwise meet the law’s placement criteria, as foster parents. CSS would not, because of its sincerely held religious beliefs, place foster children with unwed couples or same-sex couples. However, CSS would refer such couples to other contracting agencies providing foster care services for the city. Even though no same-sex couple had ever approached CSS, Philadelphia viewed this as a matter of principle. Fulton pitted CSS’s right of religious conscience against the City’s commitment to non-discrimination based on sexual orientation.

The deck looked stacked against CSS. Federal legislation like RFRA cannot be relied upon to grant a conduct exemption in a case involving a state or municipal actor. It seemed CSS would either have to prove it had been discriminated against by the city or Smith would need to be overruled so that a conduct exemption might be granted. The later course of action appeared optimal for CSS, but the Roberts court does not like overturning precedents.

The 9-0 outcome in favor of CSS was, therefore, surprising. Chief Justice Roberts wrote the majority opinion, joined by the Court’s more liberal wing of Breyer, Sotomayor, and Kagan, as well as center-right Kavanaugh and Barrett. Concurrences were provided by Alito and Gorsuch, joined by Thomas and each another. Smith was not overruled, but CSS got its conduct exemption.

How did this happen?

The Supreme Court may very well have reinterpreted Smith’s “generally applicable law” to mean a law that is uniformly applicable and without exceptions, although it didn’t explicitly use these words. If public officials can exercise some discretion (even if those officials don’t understand the matter to be subject to discretion), then it appears that they must consider whether religious hardship will result when persons with sincerely-held religious beliefs profess that their religious practice is being burdened. Moreover, the Supreme Court indicated it will evaluate exercises of discretion by public officials according to a very rigorous form of strict scrutiny. It won’t be good enough for the state to claim a compelling interest in general terms; it will probably need to show that it cannot make an exception and still advance that interest.

In Fulton, the Supreme Court found that the city had discretion in dealing with CSS by pointing to a paragraph in their agency contract, under a heading titled “Rejection of Referral,” that stipulated: “Provider shall not reject a child or family including, but not limited to, . . . prospective foster or adoptive parents, for Services based upon . . . their . . . sexual orientation . . . unless an exception is granted by the Commissioner or the Commissioner’s designee, in his/her sole discretion.” The majority zeroed in on the words “in his/her sole discretion” and that became the linchpin of what was needed to decide the matter. If the City had the discretion to do otherwise in a case that would cause religious hardship to CSS, it needed to grant an exemption unless it had a compelling reason to do otherwise.

Is this just a quirky decision or is it the beginning of a trend?

Alito believes it is flimsy precedent. He described the approach taken by the majority thus: “This decision might as well be written on the dissolving paper sold in magic shops. The City has been adamant about pressuring CSS to give in, and if the City wants to get around today’s decision, it can simply eliminate the never-used exemption power.”

That may be true. But perhaps there is cause for a measure of optimism. Discretion in applying laws, and exceptions to general laws, abound.

It will be interesting to see whether Fulton is extended to allow for conduct exemptions in cases where laws have statutory exceptions but do not empower a particular officeholder or agency to exercise discretion.

Pre-Smith, conduct exemptions could be granted by considering whether public employees were exercising their discretionary powers earnestly to accommodate religious practices. Consider the unemployment case of Sherbert v. Verner, which involved a Seventh Day Adventist denied unemployment insurance benefits because she refused to work on her Sabbath. Sherbert articulated the pre-Smith approach of applying strict scrutiny whenever a substantial burden had been placed on religious practice. The new Fulton approach requires those with similar discretion to consider religious hardship. The Fulton approach can lead to the same results as the pre-Smith approach in Sherbert. Regardless of the verbal formula, a conduct exemption might be feasible, depending upon the facts.

Roberts motioned toward this conclusion by citing as authority the following from Smith: “where the State has in place a system of individual exemptions, it may not refuse to extend that system to cases of ‘religious hardship’ without compelling reason.” Roberts neglected to mention that this sentence began with a qualifier (“…our decisions in the unemployment cases stand for the proposition that…”) and is found within a paragraph that limited conduct exemptions to unemployment cases. So Roberts is expanding the Sherbert principle using the same words that Smith used to contain it. After Fulton, unemployment cases are no longer the exception to the rule. They illustrate the kind of situation in which public officials should exercise their discretion to consider religious hardship.

It will be interesting to see whether Fulton is extended to allow for conduct exemptions in cases where laws have statutory exceptions but do not empower a particular officeholder or agency to exercise discretion. If statutory exceptions come to matter in proving that a law is not generally applicable, an array of cases could permit conduct exemptions even while upholding Smith. Take for instance Wisconsin v. Yoder. The Amish wanted a conduct exemption from the requirement of sending their adolescent minors to public schools but they did not fall “within any recognized exception to the compulsory-attendance law.” There were exceptions, and this may be all that is needed in a post-Fulton world.

Consider Smith itself, in which “Oregon law prohibits the knowing or intentional possession of a “controlled substance” unless the substance has been prescribed by a medical practitioner.” The fact that medical practitioners can prescribe could be viewed as an exception to an otherwise generally applicable law. In a post-Fulton world, that consideration might weigh in favor of a conduct exemption.

Justice Alito is undoubtedly correct that the City will be tightening up its contract with CSS to take out language suggestive of discretion. But it is also possible that these efforts will evince that Philadelphia is not neutral and is acting to target CSS. Attempts by public officials or lawmakers to take away discretion for the purpose of eliminating conduct exemptions might prove to be as constitutionally fruitless as they are unwise as a matter of policy.

It remains to be seen how far the Supreme Court will take the approach it has created in Fulton. But Justice Barrett’s concurrence is suggestive: “As a matter of text and structure, it is difficult to see why the Free Exercise clause—lone among the First Amendment freedoms—offers nothing more than protection from discrimination.” Smith remains good law. Yet Fulton appears to have rewritten its meaning. The free exercise clause is dead; long live the free exercise clause.